Retailer Daily

Mervyns Sinks into Bankruptcy

Mervyn's will keep doors open at all of its 175 stores even while filing for Chapter 11 bankruptcy protection from its creditors, writes VMSD. It's too early to discuss layoffs or store closings, said a company spokesman. The sustained economic downturn in California and other key states in which it operates makes a turnaround "impossible," according to Sun Capital Partners, which acquired the chain from Target in 2005 for $1.2 billion. The struggling department store listed liabilities and assets of $500 million to a $1 billion each from various creditors, including Nike USA, Vans, Wicked Fashions, Hanes Brand-Hanes UW, Lolly Togs, Fashion Resource, VF Jeanswear, and Jansport/VF Outerwear. Levi Strauss & Co. is its largest unsecured creditor. In recent weeks, vendors' shipments had been delayed and their key lenders had stopped approving orders to Mervyn's, so the filing came as no surprise to the industry.