Wards making the dust fly

Remodeling: The chain has decided to remodel its stores in Baltimore- ashington and four other markets this year, another step on its way back from bankruptcy.

Retailing

February 12, 2000|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

A makeover of the once-dowdy Wards is proving such a hit that the retailer plans to remodel all its department stores in five major markets, including the Baltimore-Washington region, by mid-October, the chain's chief executive officer said yesterday.

Because of increased sales at remodeled stores, the Chicago-based company will finish converting all stores in markets such as Baltimore-Washington, Chicago and San Francisco to the new format this year, Roger Goddu, the CEO, said yesterday during a promotional stop in Towson.

Wards, which emerged from a two-year bankruptcy in August, used the Towson store as a prototype in 1998, when it unveiled a new format with a circular "racetrack" design, brighter lighting, updated fixtures and a trendier mix of apparel and home accessories. The chain, which dropped the Montgomery from its name last year as part of its image makeover, rolled out another 40 remodeled stores last year, including outlets in Annapolis, Laurel, Glen Burnie and St. Charles.

This year, the remaining eight stores in the Baltimore-Washington region, including Rosedale, Security Square, Bel Air, Hagerstown and Frederick, will be remodeled. They are part of 35 locations targeted in major national markets this year.

"The key to the turnaround is the new prototype stores," Goddu said. "This is what the company is about going forward."

Store improvements, at a cost of $1 million to $2 million each, have helped boost sales to an average $200 per square foot, compared with the chainwide average of $150 per square foot, he said yesterday. Sales rose an average 20 percent in the fourth quarter at remodeled stores. He expects the chain to become profitable again by the end of next year, he said.

Sales increases and responses from consumer focus groups have persuaded the chain to approach the market as a whole when doing the remodelings, Goddu said.

"That gives us a new opportunity to approach the customer in a market and take a look at the new Wards," he said.

The retailer has been battered by years of losses -- including a $106 million loss for the first quarter that ended April 3, 1999 -- the last information filed by the now-private company.

The chain's financial troubles have stemmed from its inability to keep up with shifts in consumer buying, retail experts said. Its customer base eroded as shoppers found alternatives either in mass discounters, such as Wal-Mart Stores Inc., or in hipper specialty shops.

During the bankruptcy, the chain closed more than 100 unprofitable stores. Wards was able to emerge from bankruptcy largely because of an infusion of cash from GE Capital Services, which had owned half of Wards and acquired the remainder of the chain and its credit-card business as part of the bankruptcy restructuring.

Even with its updated look, Wards will have to work hard to avoid bankruptcy again, said Peter Chapman, president of Bankruptcy Creditor's Service Inc. in New Jersey, publisher of a New Jersey-based newsletter that tracks bankrupt companies.

"I don't think it's an issue of looking better than it used to," he said. "Cleaning up the house doesn't move it out of the neighborhood. If they haven't staked out a clear place in the retail landscape, they're not going to make it."

The unanswered question is whether Wards has found the formula to distinguish itself in such a way as to win customers from rivals and increase market share.

"They are walking a tightrope," said Kurt Barnard, president of Barnard's Retail Trend Report. "But I will say, they're still in business. The rest of the world has sold them down the river a long time ago."

Goddu stopped at the Towson store to launch a $5 million giveaway with Regis Philbin, the television host of "Who Wants To Be a Millionaire."

Goddu said the promotion is designed to persuade shoppers to give Wards another chance.

Shoppers praised the redesign yesterday as cleaner and more organized.

Vivian Grant, a 48-year-old claims adjuster in Towson, said she has shopped at Wards for years and sees a difference.

"I really love the clothes now," Grant said. "Every time I come in here I see something I like."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.