Since filing for bankruptcy in July, Mervyn's has been closing stores and fighting for survival in a much-smaller form. But now the company has announced that it will close its 149 remaining stores, with going out of business sales set to begin shortly.
In a press release, CEO John Goodman announced that "We are disappointed with this outcome but the Company's declining liquidity position and the extremely challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action."
The company was taken private by a group including Cerberus and Sun Capital back in 2004, and that deal is now the subject of considerable controversy. Last month, the bankrupt company sued its former owners, alleging that the deal was structured to separate the operations from the real estate, and that the private equity owners then proceeded to sell real estate, pay themselves dividends, jack up lease payments, and essentially transfer value from the chain to the private equity buyers.
It remains to be seen what will come of that lawsuit but, if it goes to trial, it will be an interesting case that looks at the role of private equity in the financial world.
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Reader Comments (Page 1 of 1)
10-19-2008 @ 4:35AM
NV_Sparkle said...
It's not surprising that Mervyn's is done. They lost touch with what consumers wanted several years ago. It's a shame to lose another retailer, but no great loss. Hopefully, as the economy recovers, something better will take over those spaces in the malls.
10-27-2008 @ 8:25PM
mark said...
are you kidding me??? this is my favorite store.... i gave up consuming in all other stores but mervyns...... my beloved mervyns..... oh well......... rip my beloved
11-09-2008 @ 9:13AM
Shaun said...
Like this blog said, thanks to the stupidity of other people that try corporate takeovers get royaly scred over on the deal when they cant see the economy headed for a downfall and then the chain stores have to close! I for one would protest that people who have no itelligence in understanding that their might be losses after you purchase a compny should never touch the deed or rights to a company what so ever!
Sorry to see this mervyns! Back in the day you guys were the best!!!
11-17-2008 @ 6:31PM
Byrun Ennesser said...
I worked for Mervyn's for 7 years back in the early 80's. It was like a family working for the company back then. I take with me many fond memories of working there. I still have friends to this day that I met at Mervyn's. It was really a great experience and I am sorry to see the demise of the company.
11-18-2008 @ 3:09PM
k said...
I blame corrupt management. That is what happens when companies get too greedy.
Some who worked at corporate headquarters in Hayward (CA) were laid off, with severance packages. The ones who remained, the so-called "cream of the crop" were laid off 2 weeks later with NO severance, and NO vacation pay.