Thread: Mervyns may file for bankruptcy

July 21st, 2008, 12:00 am · 7 Comments · posted by HANG NGUYEN
Mervyns may file for bankruptcy protection, according to The Wall Street Journal and Women’s Wear Daily.

Mervyns has more than 175 locations in seven states, including at least 13 stores in Orange County.

The WSJ, citing unnamed sources familiar with the situation, wrote that some of Mervyns’ vendors have stopped shipments to the company and key lenders have pulled financing. Mervyns executives have been trying to convince vendors to ship merchandise to the retailer for the important back-to-school season. If that effort fails, the company could be forced to file for bankruptcy protection as soon as this month and shut down.

Also, WWD wrote that industry speculation focused on the possibility of a bankruptcy filing by Mervyns.

According to a Mervyns statement in May, the retailer said it planned to close five to 10 underperforming stores.

The company hired DJM Realty to sell off the underperforming stores with high real-estate value. The sale was expected to generate $25 to $50 million in cash to fund operations and new growth initiatives.

Also in May, Mervyns said it planned to open five new stores in core markets in 2009. In late June, Mervyns said it won’t be releasing info on store closures and openings until much later this year.

http://retail.freedomblogging.com/2008/ ... ankruptcy/

Jusy another sales outlet for imported goods an high interest credit, the low end employees will lose their jobs and management will get bonuses.

The losses will be added on and passed to the customers as "inflation" and the company will write it off and the stock will zoom.