HAYWARD, CA October 17, 2008 – Mervyns, a regional retailer in California and the Southwest, today announced its plan to hold going out of business sales at all of its remaining 149 locations and to wind down its business. The Company intends to effect this process through Section 363 under Chapter 11 of the U.S. Bankruptcy Code.
Together with its financial and legal advisers, Mervyns completed a thorough analysis of all available options, including a sale of the Company, prior to undertaking this course of action. The Company and its Board of Directors determined that holding going out of business sales during the holiday season is the best way to maximize value for the Company’s creditors. Mervyns 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 Officer of Mervyns. “Consumers know Mervyns for our style, quality, and great value and we are confident that the deep discounts available through going out of business sales will drive significant traffic in our stores.”
Mr. Goodman added, “I want to thank the many talented Mervyns associates for their outstanding efforts. Although we took a number of steps to improve our financial performance, we were unable to return the company to profitability. We appreciate the hard work and loyalty of our store associates, whose continued assistance we will rely upon during our going out of business sales.”
