Nassi Group, Gordon Bros. to Help Ward’s Liquidation

Officials of Calabasas-based Nassi Group said Thursday that they are close to signing a deal with Montgomery Ward Inc. to help the national retail chain liquidate its merchandise as it goes out of business.

Even though the agreement has not been finalized, Nassi Group and Boston-based Gordon Bros. Retail Partners, which is also in negotiations with Ward, have already sent 210 contracted consultants to Ward stores and 15 to Ward’s Chicago headquarters to oversee the liquidation process, said Albert Nassi, co-managing member of Nassi Group.

If Nassi Group wins the deal, which would be its largest contract yet, it will attempt to turn Ward’s $1.8 billion in inventory into $1 billion in revenue. Terms of the contract were not disclosed.

For the last 30 years, Nassi Group has helped retail companies going out of business move merchandise from shelves for the highest profit possible and keep costs down while doing it. Some of its current and past clients include defunct Broadway department store, Fedco and Warner Bros. retail shops. Privately held Nassi Group made $2.7 billion in sales from closing 1,000 stores in fiscal 1999, Nassi said.

“A company knows how to open a store and run a store but it doesn’t know how to close a store,” Nassi said. “It doesn’t know the proper signs to use or how to make merchandise look attractive and keep expenses in line so it doesn’t eat into revenue.”

To lure customers, Nassi Group consultants, working with Ward store managers, will make sure racks are full and scrunch them together when merchandise dwindles. Prices on merchandise will be slashed to below rival store prices, Nassi said. Prices on some of Ward’s merchandise have already been marked down 50%.

“We maximize the sales by selling as much as we can in a short time and keeping expenses in line,” so there’s money to distribute to creditors, Nassi said.

The Ward sale, which is now a week old, will last another nine weeks, Nassi said. The distribution centers will close in three weeks after all the merchandise is shipped to Ward stores, which are in 30 states.

Although competitors will likely lose some customers while the Ward close-out sale is in progress, it will be only a minor problem for them, said retail analyst Margaret Gilliam, president of Gilliam & Co. in New York.

“The sales will be a pain for competitors, but it won’t be catastrophic,” she said.

Officials at Montgomery Ward and Gordon Bros. did not return phone calls Thursday.

Last week, Montgomery Ward, the nation’s first catalog retailer that’s been around since 1872, filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code and said it will shut 258 shops and 10 distribution centers nationwide. The company cited weak holiday sales and a tough retail environment that includes younger competitors such as Wal-Mart Stores Inc. and Target Corp.

Nassi and Gordon Bros. previously worked for Ward when the retailer sought to pare its store locations and closed 70 stores between 1998 and 2000.