Mervyns: Wikis


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Mervyns LLC
Former type Private
Fate Bankruptcy
Founded July 29, 1949
San Lorenzo, California
Founder(s) Mervin G. Morris
Defunct December 31, 2008
Headquarters Hayward, California, United States
Number of locations 0 (2009)
Area served Southwestern United States
Key people John Goodman (CEO, 2008)
Industry Retail
Services Sale of clothing, footwear, bedding, furniture, jewelry, beauty products, electronics, and housewares.
Owner(s) Formerly Sun Capital Partners, Currently: The Morris Family
Employees 20,000+ (2008)
Website None

Mervyns was an American middle scale department store chain based in Hayward, California. It carried national brands of clothing, footwear, bedding, furniture, jewelry, beauty products, electronics, and housewares. Many of the company's stores were found in shopping malls. Based on 2005 revenue, Mervyns was the eighty-third largest retailer in the United States.[1]

In December 2006, Mervyns had 189 stores in 10 states.[2] However, Mervyns closed all of their locations in Oregon and Washington by February 2007, reducing its store count to 177 stores in 7 states. The company said it closed underperforming locations that did not contribute to the company's success. In July 2008, Mervyns announced it filed for Chapter 11 bankruptcy protection.[3] Three months later (October 17, 2008), the company announced that it would liquidate its assets through a Chapter 7 filing.[4][5] On October 31, 2008, Mervyn's began the process of liquidating its entire inventory in an effort to repay its creditors, and, by December 31, 2008, all remaining locations were closed. Then, on February 11, 2009, the Morris family announced that they had bought back intellectual property as well as naming rights to the company, their hope being to relaunch as an internet-based enterprise.[6]





Mervin G. Morris founded the first Mervyns store in San Lorenzo, California on July 29, 1949. The store was supposed to be named Mervin's, but the architect suggested that a spelling that used a "Y" instead of an "I" would be more visually appealing. Mervyn's was located in the midst of San Lorenzo Village, a planned residential community nestled between the cities of Hayward and San Leandro, composed of two- and three-bedroom tract homes built between 1944 and the 1950s. Mervyn's carved a niche for itself by having a relatively no-frills shopping environment that reduced overhead, enabling the store to price merchandise lower than competing department stores in the area. Mervyn's also offered basics, such as jeans, t-shirts, underwear and similar garments, as well as household linens, that were deemed "seconds" by the manufacturers, with their flaws minor and undetectable by most, at significantly reduced prices. During the 1950s and 1960s, this made Mervyn's popular with the young families comprising the majority of San Lorenzo's population. This marketing strategy was later abandoned before Mervyn's expanded beyond its original single location, but Mervyn's remained popular as a lower-priced alternative to national department store chains.

The second Mervyns store opened about 15 miles south as an anchor tenant of the Fremont Hub Shopping Center, one of two regional malls in Fremont, California in 1962. The Fremont Hub is an outdoor promenade center featuring a central courtyard mall. Other anchor tenants at the Hub when it opened included Montgomery Ward, Longs Drugs, Safeway, Woolworth, and about 100 specialty stores.

Final version of Mervyns' original logo that was used from early 1962 until late 1989
Mervyns' logo used from 1989 to 2004.

Target years, expansion

In 1978, by which time the company had grown to a chain of 50 stores in three states,[7] Mervyns was acquired by the Dayton Hudson Corporation (now Target Corporation). Mervyns kept its separate identity as a Dayton Hudson subsidiary.

In 1986, Mervyns made major expansions into the southeastern United States, with Atlanta being the site of a particularly strong expansion campaign. Mervyns, which had not previously had a retail presence in Georgia, competed for mall space with J.C. Penney and received top anchor spots at several area malls, such as the Town Center Mall, Shannon Mall, North DeKalb Mall, Gwinnett Place Mall and North Point Mall.

The foray into Atlanta was a failure, however, and Mervyns withdrew from Atlanta by 1997.[8] Its former locations were acquired by other department stores.

Mervyns also ventured into Florida during this time. This also ended in failure, with Mervyn's closing all of its Florida stores in 1998.

Mervyn's California

Mervyn's California logo that was used from 1996 until early 2001.
Remains of a Mervyn's California logo in Capitola, California.

From 1996 to 2001, the stores were rebranded as Mervyns California, in an effort to identify with its West Coast roots and history. A media campaign was launched to publicize the rebranding, with TV commercials and catalogs featuring former San Francisco 49ers' quarterback Joe Montana.

The rebranding had little effect on the company's revenues, and the "California" was dropped from the name in 2001, reverting the store back to the original name it had used for years.

Presidents during the Mervyn's California period included Paul Sauser, Bart Butzer and Diane Neal.

Sale from Target

In July 2004, Target Inc. sold Mervyns to a group of investors that included private investment firm and turnaround specialist Sun Capital Partners, Inc, Cerberus Capital Management, and real estate investment company Lubert-Adler Management Inc. Rick Leto was named the new president and chief merchandising officer in January 2005.

In June 2006, Mervyns implemented the MARS (Mervyns Advanced Retail Systems) systems, which replaced the old Target-based cash register systems that the company used. The new program streamlined cash register functions, in addition to integrating store merchandise distribution, logistics, and personnel management functions.

Store closures prior to bankruptcy

A typical 1980's Mervyn's exterior storefront.

One of the first acts of the new owners was to cease store operations in certain states, with stores in Minnesota being the first ones to close.[9]

Further store closures were announced in September 2005, as Mervyn's announced that it would begin to focus exclusively on its Western and Southwestern U.S. markets, and that 62 stores in the Midwest and South would be closed. Mervyn's stores in Michigan, Oklahoma, and Louisiana were the first to close, in February 2006. 28 stores in Texas, as well as one store in Salt Lake City, Utah, were also closed.[10]

In 2007, an additional 18 stores were closed. Of the stores closed, 17 of them were in Oregon and Washington, and one was in Grand Junction, Colorado, which was the last remaining Mervyns store in that state.[11]


Signs of financial distress and possible bankruptcy first surfaced on July 21, 2008, when the Associated Press reported that Mervyns had stopped updating its financial status[12] and that the department store's vendors ceased shipping some products to the chain, hurting the store's back-to-school season sales efforts. In addition, financing requests were denied by lenders. This raised the possibility of the company having to file for Chapter 11 bankruptcy, or going out of business altogether.[13] The company made no official comments at the time, but on July 29, 2008, Mervyns announced that it had filed for Chapter 11 bankruptcy protection.[3] The chapter 11 case was converted to chapter 7 liquidation on October 17, 2008.

Lawsuit with private equity investors

When Sun Capital Partners, Cerberus Capital Management, and Lubert-Adler bought Mervyns, the new owners changed the structure of the company, dividing it into separate real estate and retail businesses. In essence, the Mervyns real estate arm charged retailer Mervyns huge rents for its department store space.

In September 2008, Mervyns sued the private equity firms involved in the leveraged buyout of the chain, alleging that the deal had stripped the retailer of its real estate assets, forcing it into bankruptcy. Mervyns said in the suit that Cerberus Capital Management and its partners had used the increased rent to finance the buyout.[14]

Store closures due to bankruptcy

Although the company initially vowed to keep all locations open during the reorganization efforts, the company announced in August 2008 the closure of 26 underperforming stores.[15] The company hired an outside company to assist in the liquidation of assets from the stores affected.[15] The closures also marked a complete retreat by Mervyns from the Idaho market, whose sole store in Boise was one of the ones marked for closure. In Texas, a complete retreat was slated from San Antonio, where all three remaining stores were marked for closure,[16] in addition to the closure of the sole stores in Lubbock, Midland, and Odessa.

After these closures, Mervyns was left with about 150 stores: 16 in Arizona, 121 in California, three each in Nevada and New Mexico, seven in Texas and six in Utah.[15][17]

Mervyn's bankruptcy prompted the company to liquidate remaining store merchandise through dramatic clearance sales in late 2008.


Although the company attempted to undergo reorganization under bankruptcy, Mervyn's ultimately succumbed to the ongoing US recession and announced that it would liquidate its assets through Chapter 7 of the United States Bankruptcy Code[18], stating it "is the best course of action to maximize value for all of the company’s creditors, employees and other stakeholders."[19] The bankruptcy called for the company to liquidate and close its remaining stores.[4] The announcement came amidst an offer by fashion retailer Forever 21 to purchase 149 of the remaining Mervyns stores for an undisclosed amount. The original negotiations fell through, and Mervyn's liquidated all 149 stores under the bankruptcy action. Several months later, department store retailer Kohls and Forever 21 prevailed in a joint bid at bankruptcy auction to take over the leases of 46 Mervyns stores; Kohl's has assumed 31 stores, while Forever 21 has assumed 15 stores.[20] Kohls has indicated it might take over more former Mervyns locations in the future.


In a KPIX-TV interview on February 11, 2009, Mervin Morris' son Jeff revealed that the family had bought back the Mervyn's name and intellectual property, including the company's customer list.[6] It's part of an effort to relaunch the company. Morris did not say when the website would launch or how much it would cost, only that decisions will be up to his sons.

On February 18, 2009, the Mervyn's website ( was replaced with a single-page site that allows visitors to sign-up for a mailing list to receive updates about the future of Mervyn's.


  1. ^ Top 100 Retailers: The Nation's Retail Power Players (PDF), Stores, July 2006.
  2. ^ Store Locator
  3. ^ a b "Mervyns says files for Chapter 11 bankruptcy". Reuters. July 29, 2008. Retrieved July 29, 2008.  
  4. ^ a b "Mervyns Stores Plan To Liquidate, Cease Operations". KPIX-TV (CBS 5). October 17, 2008. Retrieved 2008-10-22.  
  5. ^ Sale Motion filed with the United States Bankruptcy Court, District of Delaware
  6. ^ a b "Morris Family Retakes Mervyn's Name, May Make Comeback". 2009-02-11.  
  7. ^ Emily Thornton, How Private Equity Strangled Mervyns, Business Week, November 26, 2008
  8. ^ Parisian to open in Mervyns spot at North Point, Atlanta Business Chronicle, April 4, 1997
  9. ^ "Target selling Marshall Field's, closing Minnesota Mervyns stores". Houston Business Journal. June 10, 2004. Retrieved October 9, 2006.  
  10. ^ "Mervyns to close 62 stores, exit Houston market". Houston Business Journal. September 7, 2005. Retrieved October 9, 2006.  
  11. ^ "Mervyns prepares to close GJ store". The Daily Sentinel. December 27, 2007. Retrieved December 30, 2007.  
  12. ^ "Mervyns face financial squeeze". The Associated Press (via The Arizona Republic). July 21, 2008. Retrieved July 21, 2008.  
  13. ^ "Mervyn's may be forced to file for Chapter 11: report". CBS MarketWatch. July 21, 2008. Retrieved July 21, 2008.  
  14. ^ "Mervyns says files for Chapter 11 bankruptcy". San Diego Union Tribune. October 8, 2008. Retrieved October 8, 2008.  
  15. ^ a b c "Mervyns announces select store closure as part of reorganization". Mervyns, LLC. 2008-08-13. Retrieved 2008-08-18.  
  16. ^ "Mervyn's department stores exiting San Antonio". 2008-08-14. Retrieved 2008-08-28.  
  17. ^ "Mervyns Company Backgrounder". Mervyns, LLC. 2008-02-01. Retrieved 2008-08-28.  
  18. ^ Sale Motion filed with the US Bankruptcy Court, District of Delaware
  19. ^ 10/30/2008 Mervyns Press Release (
  20. ^ Kohl's and Forever 21 Take Over 46 Mervyns (

External links


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