Brennan May Soon Own Firm He Rebuilt
There’s one sure way to upset Bernard F. Brennan, president of Montgomery Ward. Just ask him about the retailer’s needling nickname--”Monkey Ward”--and the proud chief executive can become visibly annoyed.
The name conjures up a previous era when frumpy merchandise and lackadaisical service were the norm at many a Ward store. It “goes way back,” Brennan said of the nickname. “I’ve really been trying to shed that name.”
Earlier this week, it looked as if Brennan had succeeded. Ward’s corporate parent, Mobil, agreed to sell the rejuvenated retailer to a management-led group in a deal valued at $3.8 billion. Analysts credit Brennan--a self-described hard-driving manager with little tolerance for failure--for leading a turnaround at the chain.
“I think he is the catalyst,” said retail analyst John Landschulz at Mesirow & Co., a Chicago brokerage firm. “Everybody rallies around him. His experience, his enthusiasm, his knowledge have all come into play.”
Such praise is common among industry analysts. In fact, analysts had speculated that any buyer for Ward would have demanded that Brennan remain in charge as part of the deal.
Mobil executives appointed Brennan, 49, as president of the Chicago-based retailer in 1985. His mandate: rebuild Ward so Mobil--which had tired of the retail business--could sell the chain.
Brennan began his retailing career at age 15, filling orders at a Sears, Roebuck & Co. catalogue warehouse. His father was a buyer for Sears and his mother left the family in Chicago to work at Sears stores in Mexico City. And his older brother, Edward, is president of Sears--the world’s largest retailer.
Many in the industry say there is a sibling rivalry between the Brennan brothers. “I think it’s absolutely ridiculous,” Brennan said of those rumors. “I can’t comment on my brother only to say that I feel very good about him.”
Brennan originally came to Ward in 1982 with a track record for turning around ailing operations. While president of Sav-A-Stop--a Jacksonville, Fla., distributor of health and beauty products--Brennan saw that company’s market value rise to $72 million from $5 million.
But soon after Brennan left Sav-A-Stop for Ward, he ended up feuding with Stephen L. Pistner, who was then president. Brennan left Ward within a year.
When he returned in 1985, Brennan pursued a strategy that he had helped develop under Pistner.
Under this plan, Ward has moved away from being a mass merchandiser carrying everything from socks to saws. Instead, Ward has decided to try an emulate specialty retailers, like the Limited and Circuit City, which have become industry leaders by focusing attention on one category of merchandise.
Brennan described Ward stores as four specialty stores--appliances and electronics, apparel, home furnishings and automotive service--operating under one roof. Meanwhile, Brennan decided to pursue an aggressive cost-cutting policy begun under Pistner. Besides stores and branch offices, Brennan decided to shut down Ward’s venerable catalogue operation. Ward started out as a catalogue house in 1872, when company founder Aaron Montgomery Ward mailed out a one-page price list to farmers.
“The big challenge was to get the costs down just so they could literally survive,” analyst Landschulz said. “There’s an enormous inertia (among retailers) to close something down.”
So far, the results of these efforts have apparently paid off. Ward earnings climbed to a record $130 million last year from $42 million in 1985.
After years of retrenchment, Ward has begun to open new stores. Some of the stores will be free-standing specialty shops, like Electric Avenue, Ward’s electronics and appliance stores.
Brennan said Ward’s next biggest challenge is improving its apparel section. “It is where we have the lowest consumer acceptance,” he said. “We tended to be more conservative and more down scale.”
Brennan has a reputation among employees as an impatient and demanding manager--a description Brennan does not dispute. “I expect results,” he said. “My tolerance level of failure is not very high.”
One of the reasons Brennan drives others and himself so hard is his belief that most people work only at half of their capacity.
Brennan concedes that he, too, falls short of working at capacity. But he added: “I’m getting pretty high up there.”
