Palace Revolution at Ward's

"I'll be here until I'm six feet under," Sewell Avery once confided to a Montgomery Ward vice president in the dazzling interval of friendship before Board Chairman Avery inevitably fired the veep for "disloyalty." To keep his tight control of the mammoth retail company for 24 years, Avery fired dozens of other executives he suspected of undermining him. Last week the plot that Avery always imagined actually happened. He was forced to resign under pressure of a palace revolution led by a majority of his own board of directors. On hearing the news, Wall Street showed how it felt about Avery. A wave of frenzied buying forced the New York Stock Exchange to suspend trading in Montgomery Ward stock for nearly an hour and sent it up 4 1/2 points in a day.

The rebels were five "outside directors" (non-Ward executives) on the nine-man board, all old friends of Avery. They were informally led by lean, leathery Philip Clarke, 65, chairman of Chicago's City National Bank & Trust Co., who had been trying for months to arrange an easy out for Avery. At 81, Avery's once fabulous memory had begun to fade: he "floated," as one friend put it, speaking confusedly but autocratically, brooking no correction.

Clarke's plan, hatched while Louis Wolfson launched his unsuccessful bid to control the company, was to arrange a merger with Allied Stores Corp. It seemed like a natural: Allied had young executives and expansion plans; Ward had the cash. Avery could announce the deal and ascend gracefully into the honorary chairmanship, assured that Ward was safe from Wolfson.

New Mandate? But Avery angrily turned down the deal. When the annual meeting publicly exposed Avery's slipping grip and Corporation Secretary John Barr had to take over the gavel, the five directors knew they could wait no longer. They decided that Avery must be replaced by up-and-coming John Barr. Also slated for ouster: Edmund Krider, 42, an ex-accountant picked as $76,000-a-year president by Avery in 1952, who was considered to possess Avery's ruthlessness without either his charm or ability. The directors tackled Avery again, suggested that having won over Wolfson, he retire at his peak. Avery again refused, saying that the meeting proved he had a new mandate to continue.

But the pressure grew too great for Avery. His doctor and his two daughters begged him to resign. The directors instructed Barr to call a special meeting of the board, prepared a resignation for Avery to sign. At the board meeting the expected bitter showdown did not occur:

Avery capitulated and readily signed the resignation. Avery will remain on the board of directors.

Incoming Chairman John Barr, 47, born on a Hoosier farm, looks enough like Avery to be his son. He stands 6 ft. 1 in.

tall, has the same lean, lanky build, the same courtly manners and, at close range, the same considerable charm. Like Avery, he is a lawyer (Indiana '30) and a "clean-desk man." He started in Ward's legal department in 1933, quickly rose to be director of labor relations. Avery's respect for Barr rose at the way he masterminded Ward's fight against the War Labor Board, which included the famed carrying-out of Avery by the Army. Under Barr, the union was kept out of Ward. Recently, when Avery needed the A.F.L. Teamsters' support against Wolfson, Barr was just as effective at making a deal with the union (TIME, April 11).

"He's Tops." By 1949 Barr's affable efficiency had won him a vice-presidency and the key post of corporation secretary. He survived the great man's purges partly by knowing when to keep his mouth shut. When he disagreed with Avery it was always in private and in a courteous manner. Barr is popular with the staff, has even won a Wolfson accolade: "In my book, he's tops."

Immediately on his election, Barr went quickly to work. He planned to give raises in specific places and departments where they were long overdue, hoped to stir up employee initiative by loosening the tight controls imposed by Avery, e.g., allow buyers to buy--virtually impossible under Avery. He hoped to open up a new store or two, lay plans for an employee pension plan, put an end to the traditional Avery policy of secrecy with the press. To replenish Ward's ravaged top executive echelon, down to one vice president, he began setting up a new management team. In one day he named three new veeps from the ranks: Ward's Treasurer Howard Kambestad, 45, Personnel Manager Drummond C. Ball, 39, Soft Goods Merchandiser George H.

Kleisner, 46.

The Boss. At week's end, the first meeting of the new board showed clearly who was boss. The official tally of the proxy fight for control, announced last week, gave Wolfson enough votes to put three directors on the nine-place board.

They are Wolfson, New York Financier Alexander Rittmaster and Merchandising Adwoman Bernice Fitz Gibbon. At the first meeting of the new board, they too found out who was going to run things.

With Barr presiding, the board quickly revised the bylaws, pared the membership of the all-powerful executive committee from five to three. To it, the board named Barr, Clarke, and Director C. H.

Shaver, another member of the old management. This gave Barr and Clarke complete control of the company in most critical matters. This was the first blow at Wolf son. The second : the board steam roller flattened Wolfson's plea for a committee to search out a new president, smoothly named Chairman Barr to that post as well. When the meeting ended, Wolfson, shut out completely, was near inarticulate and trembling with rage. If he continues his batt'e for control of Ward's, he will have to fight a tough man.

This file is automatically generated by a robot program, so reader's discretion is required.