Wards Inks Deal For Credit Card Operations Through Expected Emergence From Chapter 11

Furniture World Magazine

Montgomery Ward announced that it has reached an agreement with Monogram Bank and Montgomery Ward Credit Corporation (MWCC), two subsidiaries of GE Capital Corporation (GECC), for uninterrupted operation of Wards' private credit card. The agreement, which was approved today by the United States Bankruptcy Court and is supported by the official creditors committee, will govern operation of the retailer's private credit card through Wards' expected emergence from Chapter 11 protection in 1999. Under the. terms of the deal, Wards will provide additional payments of $2 to $3 million per month to Monogram/MWCC in lieu of an assumption of the credit card operation by Wards or another financial institution. "Today's agreement is a major step forward in our reorganization process and demonstrates a high level of confidence in Wards," said Roger Goddu, Chairman and CEO. "The seamless continuation of service is in the best interest of Wards and our customers, half of whom regularly use their Wards credit cards for purchases." "This agreement also allows management to maintain its focus on the important merchandising and operational initiatives that we have been implementing over the last eight months," Goddu continued. "Building on the initial success of our turnaround strategy remains priority number one. We've already seen significant progress in strategically important areas including top-line sales growth, major gross margin improvements across all businesses and consistent expense reduction. In total, we have met or exceeded plan in most financial areas for the past four months. We believe these trends indicate that Wards is. on track for a successful reorganization and emergence from bankruptcy protection in Spring 1999." Wards is one of the largest privately held retailers in the United States and operates 295 full-line stores in 37 states.