NEW YORK -- Is GE Capital ready to pull the plug on Wards?
Wards and GE officials could not be reached Tuesday when speculation surfaced that the retailer's days may be numbered.
"There are rumors of an announcement and it's not going to be a good one," said one supplier.
One retail source said an announcement could be imminent, possibly this week, while a competitor said that Wards' store renovations to a format that's easier to navigate and shop and comparable to Kohl's, looked good. About 70 of Wards' 250 stores featured the renovations.
A weak Christmas, which many retailers are said to have experienced, could have been a death blow for Wards, the sources speculated.
Wards has long held a tenuous market position and weak brand image, and has been outpriced and outmerchandised by larger, more nimble competitors, notably Wal-Mart, Kohl's and Target Stores.
Nobody would be surprised by a move to liquidate, with many believing the chain should have liquidated after its first trip to bankruptcy in 1995. GE received 100 percent of the equity of Wards as part of the retailer's emergence from bankruptcy in August 1999, and GE's support has been the primary reason Wards has survived so long.
Some credit sources estimated that GE has continued its support of Wards to recoup some of the $1 billion it had already invested in the chain over the past three years. Another impetus for GE's continued support is Wards' credit card business, which is run by GE and believed to be highly lucrative.
But factors generally grew hesitant about checking Wards' credit earlier this year because of fears that GE would liquidate the chain, given the steep ongoing losses. In an effort to shore up trade credit for the fall selling season, GE put a $100 million equity investment into Wards in July.
The money was used to pay down the chain's revolving debt and return its borrowing availability to approximately $150 million. GE put another $20 million into Wards in September for similar reasons.
Wards is the largest privately held general merchant in the country, with annual sales of $3.2 billion.
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