Mervyn's to liquidate, 'going out of business' sales

NEW YORK (MarketWatch) -- The tightening credit market has claimed the life of yet another retailer, with bankrupt department-store chain Mervyn's the latest to call it quits.

After exhausting all other options, Mervyn's, the 59-year old retailer in California and the Southwest, said it plans to hold "going out of business" sales during the holidays at all of its remaining 149 locations. The Hayward, Calif.-based company, which filed for Chapter 11 bankruptcy protection in July, said that it will offer deep discounts to drive traffic to its stores.

"We are disappointed with this outcome," said Mervyn's Chief Executive John Goodman. "Although we took a number of steps to improve our financial performance, we were unable to return the company to profitability."

Mervyn's joined other retailers such as Linens 'n Things that decided to fold their operations after the financial-sector meltdown squeezed off sources of financing for companies across the board, let alone struggling chains seeking a turnaround, analysts have said. Mervyn's deep discounts during the holidays, the industry's biggest selling period, are also expected to further pressure rival department stores and other retailers that already are headed for their worst holiday season, by some measures, in 17 years.

Department stores and apparel retailers have been among the worst hit as fears of recession and wild swings in the stock market have curtailed consumer spending for discretionary merchandise. Analysts have said this holiday season may be a make-or-break time for even more retailers, and pressure mall and other commercial-property developers with increased vacancies. Cheap-apparel chain Steve & Barry's and electronic-gadgets retailer Sharper Image were among others that had filed for bankruptcy, resulting in additional store closings. 

Market Watch

Home
RSS Feed
Email Subscribe