Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 15, 1990 TAG: 9007130758
SECTION: BUSINESS PAGE: B1 EDITION: METRO
SOURCE: Deborah Evans Business Writer
DATELINE: LENGTH: Long
As president and chief executive officer of Montgomery Ward & Co., Brennan said he's had his eye on the area, one he considers a prime opportunity to match the retailer's merchandising and goods with demographics of household income and age of shoppers.
The Roanoke Valley offers what the national department store chain figures is its primary customer: households with median annual income of $25,000 and headed by people who are 32.4 years old.
"We are really dealing in middle-America," he said. "Demographically, Roanoke is very parallel to Montgomery Ward customers."
The company will get the chance to test the match this week. On Friday, Montgomery Ward will open two stores, an 80,000-square-foot outlet at Valley View Mall in Roanoke and a 70,000-square-foot store at Lynchburg's River Ridge Mall.
Both are spaces vacated in February when the bankrupt Miller & Rhoads chain closed. Brennan said those vacancies allowed him to test "the marriage of economic opportunity and a viable market."
What local consumers will see is very different from the last time Montgomery Ward operated in Western Virginia. Until 1961, the company operated a small catalog sales outlet in downtown Roanoke.
In the meantime, the company has quit the catalog business. Under the pressure of financial loses, Montgomery Ward in 1985 launched a restructuring and face lift of its stores based on what Brennan called his "value-driven, speciality store concept."
The operating philosophy is that "our customers want three things: brand names, competitive prices and customer service," said Montgomery Ward Executive Vice President Malvin Pavik. He heads the chain's eastern territory, including Virginia.
Although analysts say the jury is still out on Montgomery Ward's revamping, the company reported a $150 million profit last year on sales of $5.28 billion. In 1988 sales were $4.86 billion, meaning a 3 percent gain last year. Earnings were up by $139 million last year.
The 1985 overhaul included redesign of Montgomery Ward's stores to resemble a series of specialty shops within the larger store, a mall within a mall.
Electric Avenue, for example, contains appliances and consumer electronics. Home Ideas has domestics and other home furnishings; The Apparel Store contains clothing and shoes; and Doctronics is the department for product service and repair. In Roanoke, Auto Express, Ward's auto parts and service department, will open in November.
Each specialty department has its own color scheme with merchandise displayed to make customers feel they are in independent shops rather than sections of a large department store.
The Roanoke store will have neon signs throughout and each shop will have carpet to match the signs' colors. Electric Avenue will be mauve. Home Ideas will be cream colored and the men's clothing section will be green. Aisles and walkways will have a wood-grain type flooring.
In the Lynchburg store, the Electric Avenue department will be blue.
Because the Roanoke and Lynchburg stores are going into existing structures, there were limitations on how much of the specialty shop concept could be implemented. But the differences are so subtle, customers familiar with the Montgomery Ward look probably won't notice what is missing, said Kathy Cabler, assistant manager of the Roanoke store.
For example, the Roanoke store's ceilings are lower than typical for Montgomery Ward, she said.
The chain also touts low prices on brand-name merchandise and claims to match any competitor's price.
The Roanoke store is managed by JoAnn Francis, a 20-year Montgomery Ward veteran who transferred here from the chain's Frederick, Md., store. Francis said she is counting on her 180-member work force to fulfill the company's goal of customer service.
Similarly, Steve Kirby, manager of Ward's new Lynchburg store, said his top priority is "exceeding customer expectations" by performing such extras as helping customers carry out their bags "when we can."
Each Montgomery Ward employee, called an "associate" by the managers, receives about 60 hours' training to that end.
"We're very serious about being there for the customer, about visibility," Francis said. In fact, even before the Roanoke store opened, her employees serviced some products Roanoke residents apparently purchased at Montgomery Ward stores elsewhere.
That the company's call for workers drew applications from some 1,700 people in the Roanoke Valley is another indication the new store will be well-received, she said. At one time, she said she was concerned about being able to find enough applicants because of the city's low unemployment rate.
Marjorie Skidmore, Roanoke area manager for the Virginia Employment Commission, said the chain's name attracted many of the applicants, some of whom were seeking better jobs than they already had.
Montgomery Ward appears to be trying to get a head start in its new market. Before opening, the chain purchased mailing lists and began sending credit card applications to prospective customers in the Roanoke and Lynchburg areas. The company sent 40,000 screened applications to potential Lynchburg customers and 100,000 to households in Roanoke.
After the initial flurry associated with the store openings subsides, the chain will rely on an active marketing campaign to maintain customer interest, said Pavik.
The stores will have at least three storewide sales every week. The company relies on newspapers and direct mail for its advertising, he said.
by CNB