MONTGOMERY WARD DEMONSTRATES STRONG LIQUIDITY

Furniture World Magazine

Showing promising initial results from its new merchandise strategy, Montgomery Ward & Co., Incorporated today announced record furniture sales for the Labor Day Weekend, August 30 through September 1, 1997, including the best single furniture sales volume day in company history. The strong sales figures reflect Wards' developing strategy of broadening its furniture offerings and gearing a more traditional selection to the lifestyle needs of its core customer. The initiative is part of the retailer's plan to build on its core strengths including furniture, appliances and jewelry while expanding fashionable, credibly priced apparel offerings and other soft lines. The Company's new merchandise strategy is backed by strong liquidity, with $185 million in cash coupled with an undrawn $1 billion DIP financing facility, The current liquidity and DIP availability is sufficient not only to make timely payments through the 1997 Holiday season, but will also ensure a strong 1998 selling seasons as well. "Clearly, Wards has much work to do, but the Labor Day furniture sale results indicate that our re-focused merchandise strategy and efforts to communicate the new Wards to core audiences is beginning to bring customers back into our stores," said Tom Grimes, President of Montgomery Ward Hardlines. "The addition of important new furniture vendors such as Broyhill, along with others throughout the store as well as plans for remodeled departments, improved customer service and other strategic initiatives will enhance our position as one of America's top retailers." Roger Goddu, Chairman and CEO of Montgomery Ward, added, "These encouraging results indicate that our marketing initiatives and expanded merchandise offerings in key categories will prove successful. Our strong liquidity base, which includes the undrawn $1 billion DIP financing facility, will help us accomplish our objectives and position Wards for the coming Holiday season and beyond." To support Wards' new merchandising and brand building initiatives, the Company recently launched a new advertising campaign which is also beginning to yield results. Electronic broadcast spots introduced the theme line "Shop Smart, Live Well. Wards.," while print ads adopted a more fashionable approach to product and price promotion. In markets where the new broadcast ads appeared, sales increases were dramatically above the levels in other markets, lending credence to the increased focus by Wards on electronic media as a key element of an evolving marketing strategy to effectively position the Company. Montgomery Ward is the largest privately held retailer in the United States, currently operating a chain of 400 stores in 43 states. Upon the closing of its specialty concepts, Montgomery Ward will operate 356 stores in 39 states