MONROE - The closing of the Montgomery Ward, Inc., retail chain will have a direct impact on at least one area business - La-Z-Boy, Inc., will lose a customer that provided nearly $20 million a year in sales, a loss made worse by the overall slowing in the furniture industry.
“Ward's has been a good customer for 40-plus years. It's been an old and important customer and it's a shame [about the closing],” said Mark Stegeman, treasurer of the Monroe-based furniture manufacturer.
All but 10 percent of the company's dealings with Ward's was in recliner sales, with the rest in bedroom sets and end tables. Ward's accounted for less than 1 per cent of La-Z-Boy's total sales.
The treasurer said La-Z-Boy executives “had heard rumblings a few weeks prior” to the closing news that it might come, but still were disappointed because the furniture business had been going well for Ward's, particularly in remodeled stores. The Monroe furniture maker planned this spring to roll out a youth furniture program for retailer.
Mr. Stegeman anticipates the retail chain will have an extended going-out-of-business sale, which may mean orders for more inventory from La-Z-Boy.
La-Z-Boy late last monthissued a warning that its earnings for its quarter ending Jan. 27 will be lower than expected because of lessening demand for furniture.
The third-quarter earnings will include increased reserves to cover bad debt related to Ward's Chapter 11 bankruptcy filing.
As for the future, Mr. Stegeman said, “We're fairly confident that the shopper who was going into Ward's for a La-Z-Boy will end up at one of the L-Z-Boy Gallery stores or end up at another retailer that sells our product.”
Mr. Stegeman said. “one of the things that's important about La-Z-Boy is that the brand name adds a lot of strength in down times. Customers tend to go to names they know and trust.”