Mervyns Stores Plans To Cease Operations
ByHAYWARD (CBS 5) ? Department store chain Mervyns LLC will announce Friday that it is filing for chapter 7 bankruptcy protection — which means the Hayward-based retailer must shut its doors and liquidate its inventory.
Over the summer, Mervyns had filed for chapter 11 protection from its creditors in U.S. bankruptcy court for the District of Delaware. The company said at the time that it planned to continue business as usual while it reorganized.
The privately-held retailer, which has languished for several years, operates about 175 locations in seven states - but primarily in California.
Industry observers said the chain’s heavy concentration in California, which is among the states hardest hit by the housing crisis, had made a turnaround very hard.
The 59-year-old chain had also been squeezed between high-end department stores and discounters like Wal-Mart Stores.
It had been shuttering stores and leaving states such as Oregon and Washington since 2005, after a consortium of private equity players including Sun Capital Partners bought Mervyns from Target for $1.2 billion.
Mervyns officials declined to comment Thursday evening, except to say there would be some type of announcement from the company on Friday. Employees at Mervyns corporate headquarters told CBS 5 that they were asked not to talk with the media.
