When Montgomery Ward & Co. announced Tuesday that it would start accepting the Sears Discover card at its San Diego-area stores, insiders cracked that perhaps the old retailing rivalry had been softened by brotherly love: Edward A. Brennan runs Sears and his brother, Bernard F., is head honcho at Ward's.
But retailing is no joking matter to the fiercely competitive Brennans. Analysts say Ward's decision was based strictly on business considerations--not family ties--and is a wise one that will bring in more customers by making shopping more convenient.
"The Sears credit card is a very attractive card, and Montgomery Ward needs that increase in business," said John S. Landschulz, an analyst with Mesirow & Co. in Chicago, the headquarters city for both Sears, the nation's largest retailer, and Ward's, the sixth largest.
Walter F. Loeb, an analyst with Morgan Stanley & Co. in New York, said that he was surprised the company would accept a competitor's card but that the move will ultimately be very smart for Ward's. "It shows that Sears is doing a terrific marketing job," he added.
Sears' Discover card, broader in scope than its Sears card and the first general purpose credit card since Visa and MasterCard were introduced more than 20 years ago, is being tested in the San Diego and Atlanta areas.
This has been a year of change at Ward's, a subsidiary of Mobil. In May, Mobil announced that it planned to divest the business after reorganizing it into a smaller, leaner company. The chain, which had years of losses before turning a small profit in 1983, reported profits last year of $53 million on sales of $6.5 billion. And in August, the retailer said it will phase out its 113-year-old catalogue operation by the end of 1986.
In announcing the decision to accept the Discover card as of Nov. 15, Bernard Brennan said: "We are making this move for the convenience of our customers. A key element of our strategy to become a value-driven specialty store retailer is to provide our customers with the variety of products and services they want."
Ward's, which has at least 8 million customers using its own credit card, has also accepted MasterCard and Visa since 1982. In addition, it is testing the use of several other cards.
Stores that will accept the Discover card are in San Diego, La Mesa, Bonita, Escondido and Mission Viejo.