Montgomery Ward Stops Some Payments

Montgomery Ward Holding Corp. has stopped paying some of its vendors, a sign that the ailing retailer’s financial woes are building, sources said. Some factoring companies, which fund receivables for vendors to retailers, said Ward has not paid for goods shipped late last month. The privately held retailer has told vendors that payments will begin flowing in a couple of days, sources said. But suppliers were expected to suspend shipments to avoid further risk. Ward’s decision to stop payments likely stemmed from disagreement between the company and its lenders over the retailer’s near-term strategy, analysts said. The company is negotiating to postpone a payment deadline for $1.4 billion in debt. It also is seeking to close a deal to sell its Signature Group direct-marketing unit. But a dispute apparently has erupted among Ward, its lenders and General Electric Co.’s GE Capital, which owns half the company, over the Signature sale. Last year, Montgomery Ward lost $249 million.