Ailing department store chain Mervyns LLC, which had been operating for almost five decades, has become the latest merchant headed for extinction.
The retailer, which filed for Chapter 11 bankruptcy protection in July, said Friday that it plans to begin liquidation sales at its remaining 149 stores and wind down its business.In August, Mervyns said it was closing four Arizona stores. With Friday's announcement, the company's remaining six stores in the Valley also will close.
Stores already holding liquidation sales include Mervyns at 9109 E. Indian Bend Road in Scottsdale Pavilions; 4710 E. Ray Road in Ahwatukee Foothills; and 4643 E. Cactus Road near Paradise Valley Mall.
The company said Friday it will turn all remaining stores over to liquidators to stage going-out-of-business sales, but Mervyns did not say when those sales would begin.
They include stores at 1240 E. Main St. and 6505 E. Southern Ave. in Mesa; 2992 N. Alma School Road in Chandler; and 4095 S. Gilbert Road in Gilbert.
The Hayward, Calif.-based chain said liquidation sales during the holiday season were the best way to maximize value for the company's creditors after exhausting all its options, including the sale of the company.
It also cited a fierce retail environment and declining liquidity as factors forcing the company's liquidation. Mervyns now operates mainly in California and has seen its sales drop further as the state is among the hardest hit by the real estate slump.
Mervyns said it plans to pursue the liquidation under the Chapter 11 bankruptcy code, a move that typically allows companies to retain more control over the selling off of assets. In a Chapter 7 filing, the court would immediately appoint a trustee to take over the case. The company said it intends to retain an outside professional services firm to assist in the liquidation sales of inventory.
"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," said John Goodman, chief executive of Mervyns, in a statement. "We are confident that the deep discounts available through going out of business sales will drive significant traffic in our stores."
Mervyns' announcement marks the latest retail obituary and represents yet another blow to the nation's malls, which are grappling with increasing vacancy rates in a deteriorating economic environment.
On Tuesday, specialty retailer Linens 'n Things, which filed for bankruptcy protection in May, announced it will begin liquidation sales at its stores as early as this week after failing to find a buyer to operate the company.