Montgomery Ward invented the general-merchandise mail-order catalog — it was distance retail before Sears, before Amazon, before the phrase existed — and on December 28, 2000, after 128 years, the company announced it was going out of business. Aaron Montgomery Ward launched it in Chicago in August 1872 with about $2,400 and a single printed sheet listing goods and prices, aimed at rural families who were otherwise at the mercy of a local general store. Backed by a money-back guarantee and an early endorsement from the farmers’ Grange movement, the catalog grew into a thousand-page “Wish Book” rival, and Ward — for two decades the only national mail-order house of its kind — was, quite literally, the Amazon of the 1870s, two full decades before Sears entered the same business in 1893.
For a company that pioneered selling at a distance, the rest of its history is a study in being a step behind. It opened its first retail store in 1926, reaching roughly 556 locations by 1930, but always trailed Sears in stores, sales, and ambition. The decisive failure was timidity at exactly the wrong moment: after the Second World War, the famously cautious chairman Sewell Avery, convinced a depression was coming, refused to open stores or follow customers into the booming suburbs, hoarding cash while Sears expanded aggressively into the postwar boom. Ward never recovered the lost ground, and never found a defensible identity afterward.
The discount era finished what the postwar caution started. As Walmart, Kmart, and Target redefined value retail and the specialty chains carved up the categories, Montgomery Ward remained a mid-tier department store that was neither cheap enough, distinctive enough, nor modern enough to matter. It passed through owners — Mobil bought it in 1976, GE Capital ended up controlling it — filed for Chapter 11 in 1997, emerged weaker in 1999, and after a poor 2000 holiday season gave up: on December 28, 2000, it announced it would close its remaining 250 stores and lay off 37,000 employees, in what was then the largest retail liquidation in US history. The stores were gone by May 2001. The catalog that taught rural America to shop at a distance never figured out how to do it online; the brand name was bought by a catalog marketer in 2004 and reborn as a website, a ghost wearing a pioneer’s clothes.
Mervyn’s was a Western mid-tier department chain that sold affordable apparel and home goods to the American middle class for almost six decades, and at the end of December 2008 it finished liquidating every store. Mervin G. Morris opened the first one in San Lorenzo, California, on July 29, 1949, and built the format that defined the chain: a clean, value-priced department store pitched a notch below the upscale floors and a notch above the discounters, with the seasonal “Big Brand Sale” circulars and the “open, open, open” jingle that a generation of Californians can still hum. By its physical high-water mark at the end of 1996 it ran roughly 300 stores across 16 states, mostly in the West, and it had spent the previous two decades as a quiet, dependable subsidiary of the company that owned Target.
What killed Mervyn’s was not a shift in shopping habits, though those were real enough. It was a financial structure. Target Corporation, having decided the chain no longer fit its strategy, sold Mervyn’s in 2004 to a consortium of Cerberus Capital Management, Sun Capital Partners, and the real-estate firm Lubert-Adler. The buyers promptly did the thing that makes this a case study rather than a footnote: they split the company in two, separating the valuable real estate into one entity and the store operations into another. The operating company, which had owned much of its property outright, now had to pay rent to occupy buildings it had effectively just sold — and the rent, by the creditors’ later account, was set high enough to help finance the buyout itself.
A store chain that walks into a recession carrying a brand-new rent bill it never used to owe has a short runway. Mervyn’s filed for Chapter 11 on July 29, 2008 — its fifty-ninth birthday to the day — and when no rescue materialized the case converted to a Chapter 7 liquidation that October. Going-out-of-business sales ran through the holidays; the last stores went dark at the end of the year. Roughly 18,000 employees lost their jobs, and the suppliers left holding unpaid invoices went to court alleging the buyout had been engineered to fail. In 2012 the financiers and several banks paid Mervyn’s creditors $166 million to settle, admitting no wrongdoing. The chain that had owned its own real estate was, in the end, liquidated for not being able to afford it.
Service Merchandise was the largest catalog-showroom retailer in the United States — a chain built on the strange, beloved ritual of ordering from an in-store catalog and watching your purchase ride out of the stockroom on a conveyor belt — and on January 4, 2002 it announced it would liquidate every store. The format traced back to a five-and-dime that Harry and Mary Zimmerman opened in Pulaski, Tennessee, in 1934, but the company as shoppers remember it was born in 1960, when the Zimmermans turned a Nashville warehouse into their first catalog showroom. Customers browsed a thick printed catalog and the sample displays, filled out a paper order form with the catalog numbers they wanted, handed it over, and collected the goods minutes later at a pickup counter where the items arrived on a motorized belt from the warehouse out back. By the late 1990s the company ran more than 400 stores across some 37 states and topped $4 billion in annual sales, the clear industry leader.
The model was a genuinely clever answer to a 1960s problem — how to offer the deep selection and low prices of a catalog with the immediacy of a store, while keeping most inventory locked safely in the back to cut shrinkage and staffing. It was, in a sense, an early hybrid of catalog and showroom, the kind of multi-channel idea retailers would rediscover decades later. But it was also a format whose advantages evaporated as the world changed around it. The big-box discounters — Walmart, Target, the warehouse clubs, and the category-killers like Best Buy and Circuit City — offered the same brands at comparable prices with the goods on open shelves you could carry to the register yourself, no order form, no waiting at the belt. And then the internet did the catalog’s job better than any printed book could.
Caught between the discounters and the early web, Service Merchandise tried to reinvent itself as a specialty seller of jewelry, gifts, and home décor, but the pivot never took. The company filed for Chapter 11 on March 15, 1999 — at the time among the largest bankruptcies in Tennessee history — and spent three years trying to reorganize before the September 11 economic shock helped close the door. On January 4, 2002 it gave up, announcing the liquidation of its remaining 200-plus stores in 32 states; going-out-of-business sales began January 19, and roughly 8,300 store employees lost their jobs. The conveyor belt stopped.
Bradlees was a New England discount department-store chain that ran for forty-three years and died twice — the second time for good. It opened on March 14, 1958 in New London, Connecticut, founded by a trio of businessmen who, the story goes, hatched the plan in meetings near Connecticut’s Bradley airport and named the store after it. For most of its life it was a comfortable regional fixture, the place a Massachusetts or New Jersey family went for housewares, clothes, and back-to-school supplies. In 1961 the grocery chain Stop & Shop bought it, providing the capital that turned a single store into a Northeastern chain of roughly a hundred locations and, eventually, some 10,000 employees.
The first death was largely self-inflicted, and it is the wry centerpiece of the file. In 1992 Stop & Shop spun Bradlees off as an independent public company. Newly on its own, with a new CEO named Mark Cohen installed in 1994–95, Bradlees decided that competing head-on with Walmart was unwinnable and tried instead to move upmarket — to slot itself between discount stores and department stores, with higher price points, fewer of the cheap convenience staples discount shoppers came for, a push for its store credit card, and the elimination of layaway. The repositioning confused and alienated the very customers it had, produced large losses, and helped drive Bradlees into Chapter 11 bankruptcy in June 1995. A discounter had tried to talk its way out of discounting and talked itself into bankruptcy court.
It survived the first death, emerging from Chapter 11 in February 1999. The reprieve lasted twenty-three months. Squeezed by Walmart, Target, and Kohl’s all expanding into New England, carrying debt and high-cost leases, and hit by softening consumer spending, Bradlees filed for bankruptcy again on December 26, 2000 — this time as a wind-down. Liquidation sales began in early January 2001; the last of the 105 stores closed on March 15, 2001, and 10,000 people lost their jobs. The American Bankruptcy Institute later argued the real tragedy was that management kept trying to operate the chain when its most valuable asset was the leases under it.
Ames Department Stores was the discounter that small-town New England shopped at when a Walmart was still an hour’s drive away, and on August 14, 2002 it announced it would close every one of its remaining 327 stores. Founded in 1958 in Southbridge, Massachusetts by the brothers Milton, Irving, and Herbert Gilman — who started in a corner of the old Ames Worsted Textile mill — it grew into the fourth-largest discount retailer in the United States, behind only Walmart, Kmart, and Target, with roughly 450 stores across some 20 states and annual sales above $4 billion. Its niche was geographic: the rural and small-town Northeast, the towns too small to interest the giants, where Ames was often the only real general-merchandise store for miles.
What killed Ames was, in the end, a single deal. The chain had already survived one near-death experience — a 1990 bankruptcy, triggered partly by a reckless store-credit policy, from which it emerged leaner in 1992 and profitable by 1993. Then, in November 1998, it agreed to swallow the 155-store Hills Department Stores chain in a transaction valued at about $330 million including assumed debt, a deal that lifted Ames from roughly 300 stores to about 456 in a matter of months. The strategic logic was defensive — get bigger before Walmart arrived — but the financing was punishing, and converting the Hills stores cost another $170 million on top.
The debt from Hills met the tightening credit markets of 2001 at exactly the wrong moment, and the second-largest US discounter to ever liquidate found its suppliers tightening terms and slowing shipments. Ames filed for Chapter 11 again in August 2001, fought for a year, and on August 14, 2002 converted the reorganization to a Chapter 7 liquidation. CEO Joseph Ettore called it “a wrenching decision, but the right course.” The going-out-of-business sales ran about ten weeks. Roughly 22,000 employees lost their jobs, and a great many small towns lost the only department store they had.
Gottschalks was the department store that anchored the malls of California’s Central Valley and the smaller cities of the West, and on March 31, 2009 it gave up trying to survive and announced it would liquidate. Founded in 1904 by Emil Gottschalk, a German Jewish immigrant who opened a dry-goods store in downtown Fresno, it grew over a century into the largest independently owned, publicly traded department store chain in the United States — roughly 58 department stores plus a handful of specialty shops across California, Washington, Oregon, Alaska, Nevada, and Idaho, employing somewhere around 5,000 people. Its strategy was to be the good department store in the cities the national chains overlooked, and for a long time that worked.
What killed Gottschalks was not, in the first instance, Amazon or Walmart or any single competitor. It was the 2008–09 financial crisis, and specifically the credit freeze at its center. Gottschalks entered 2008 already weakened by years of soft sales and a debt load it was straining to refinance, and a department store runs on credit the way a body runs on blood — it borrows to buy the inventory it sells, and it needs lenders willing to extend that credit through the seasonal swings. When the financial system seized in the autumn of 2008, the credit a marginal retailer needed simply stopped flowing. The company was delisted from the New York Stock Exchange in October 2008, watched a rescue deal with a Chinese conglomerate collapse in December, and filed for Chapter 11 on January 14, 2009.
In a normal year, a 105-year-old regional chain in Chapter 11 might have found a buyer or new financing. In early 2009 there was none to be had — the same frozen markets that pushed Gottschalks into bankruptcy made it impossible for anyone to fund a rescue. After failing to find a buyer, the company converted to liquidation in late March 2009. The same liquidation consortium that had wound down Mervyn’s and Circuit City ran the going-out-of-business sales, and the last Gottschalks stores closed in July 2009, ending 105 years. About 5,000 people lost their jobs, and the Central Valley lost its homegrown department store.