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Sears Wrests Montgomery Ward’s Repair Business

HOFFMAN ESTATES, ILL. -Sears will fulfill service contracts for defunct retail chain Montgomery Ward under an agreement with Aon Innovative Solutions, the St. Louis-based extended warranty provider.

The deal will allow Sears service technicians to perform product repair, maintenance service and preventative maintenance checks for approximately 2.4 million former Wards customers whose service contracts are administered in 23 states by Aon and affiliates.

Under the agreement, Sears’ HomeCentral technicians will provide repair and maintenance services for major appliances and consumer electronics, among other categories previously served by Wards. Financial terms of the deal were not disclosed.

“Access to Wards’ former service contract customers is an exciting opportunity for Sears Product Repair Services, which already has the nation’s largest team of trained product technicians,” said Sears chairman/CEO Alan Lacy.

In a separate but related deal, Sears’ Product Repair Services unit has acquired assets of A & E Signature Services, the national repair business of Wards. The purchase includes the marketing rights to more than 5.4 million Wards customers, as well as intellectual property rights to A & E’s brand names and related toll-free numbers for service scheduling and parts sales.

Sears also purchased Wards’ entire inventory of repair and replacement parts and accessories.

The moves represent another step by Sears to aggressively expand its warranty repair business.

The retailer recently contracted with Sharp Electronics to provide warranty fulfillment for its microwave ovens, air conditioners and floor-care products, much to the chagrin of dealers whose customers would be serviced by a major competitor.

The acquisitions were made in tandem with Sears’ plan to purchase 18 Wards stores later this month. The units will be converted to Sears and The Great Indoors locations by spring of 2002.

In addition, Sears has hired some 900 former employees of Wards since the junior department store announced in December that it would cease operations.