Mervyn's
Private | |
Industry | Retail |
---|---|
Founded | July 29, 1949 San Lorenzo, California, U.S. |
Founder | Mervin G. Morris |
Defunct | January 1, 2009 |
Fate | Chapter 7 bankruptcy Liquidation sale |
Headquarters | , U.S. |
Area served | Western United States |
Key people | John Goodman (CEO, 2008) |
Products | Clothing, footwear, jewelry, bedding, bath, furniture, beauty products, electronics, toys, and housewares. |
Owner | Target Corporation (formerly Dayton-Hudson Corporation) (1978–2004) Sun Capital Partners (2004–2008) |
Website | Archive of mervyns.com |
Mervyn's was an American middle-scale
In 2006, Mervyn's had 189 stores in 10 states.[3] One year later, after Mervyn's closed its stores in Oregon and Washington, Mervyn's had reduced its store count to 177 stores in seven states. On October 17, 2008, the company announced that it would liquidate its assets through a Chapter 7 filing.[4][5] All remaining locations were closed by the end of the year. The Morris family, having bought back intellectual property rights to the company in 2009, announced plans to relaunch Mervyn's as an internet-based enterprise,[6] but the proposed revival never came to fruition.
History
Beginnings
Mervin G. Morris founded the first Mervyn's store in
, and similar garments, as well as household linens, with flaws minor and undetectable by most. During the 1950s and 1960s, this made Mervyn's popular with the young suburban 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 Mervyn's store opened about 15 miles (24 km) south as an
Target years and expansion
In mid-1975, Mervyn's operated stores in major cities and towns throughout California.
By 1978, the company had grown to a chain of more than 50 stores in three states,[9] and Mervyn's was acquired by the Dayton Hudson Corporation (now Target Corporation). Mervyn's kept its separate identity as a Dayton Hudson subsidiary. The average store had 80–130 employees. There was a Store Team Leader (1), Executive Team Leaders (2–4), Department Leaders (7–10), benefited team members (full-time employees not part of the leadership team), and part-time employees. All employees had "credit goals", which referred to the number of customers that opened a Mervyn's credit account. Part-time employees were expected one per every eight hours, and the leadership team was expected one per every 40 hours.
Mervyn's entered Florida in 1988 with a store at
Mervyn's California; sale from Target
From 1995 to 2001,[11] the stores were rebranded as Mervyn's California, in an effort to identify with its West Coast roots. 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 to the original name. The majority of their stores in Texas didn't even consider adding the "California" name to their stores.
In March 2004, Target Corporation announced that they planned to put the Mervyn's and Marshall Field's divisions up for sale to focus on Target stores. Target Corporation was approached by many buyers for both stores but many of the potential buyers saw value only in the real estate. Target refused to sell to the groups that wanted to purchase Mervyn's for the property value only. Target would only consider deals that would not close the company and put the then 30,000 employees out of work.
The Mervyn's locations in Minnesota were closed in 2004 as part of the deal between Target Corporation selling their Marshall Field's division to The May Department Stores Company in June 2004.[12] May purchased 9 Twin Cities area Mervyn's locations along with the Marshall Field's stores, and immediately announced closure of those Mervyn's stores. Analysts saw this as a move by the May Company to block competition from acquiring those locations. In July 2004, Target Corporation announced that Mervyn's had been sold to a group of investors that included private investment firm and turnaround specialist Sun Capital Partners, 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.
Store closures prior to bankruptcy
Sixty-two store closures were announced by the new owners in September 2005,[13] stating the 62 stores closed only accounted for 17% of the chain's sales. The closures comprised 28 of the 40 stores in Texas, 15 stores in Michigan, 10 stores in Colorado, three stores in Oklahoma, 3 stores in Louisiana; and one store closing in each state of Utah, Oregon, and California. Mervyn's had an enviable real estate portfolio, and it was believed they could further invest in those properties, and make themselves more competitive.
In 2007, an additional 18 stores were closed. Of the stores closed, 17 were in Oregon and Washington, and one in Grand Junction, Colorado, which was the last remaining Mervyn's store in that state.[14]
Bankruptcy and store closures
Signs of financial distress and possible bankruptcy surfaced on July 21, 2008, when the Associated Press reported that Mervyn's had stopped updating its financial status[15] and that the department store's vendors ceased shipping some products, 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.[16]
The company made no official comments at the time, but on July 29, 2008, Mervyn's announced that it had filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of California.[17][18] Soon, the Chapter 11 case was converted to Chapter 7 liquidation on October 17, 2008. At the time of this announcement 3 stores had just held grand openings only a few months prior to being told they would soon close.
Although the company initially vowed to keep all locations open during the reorganization efforts, the company announced in August 2008 the closure of all 26 underperforming stores..
After these closures, Mervyn's 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.[19][21]
In September 2008, Mervyn's 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. Mervyn's said in the suit that Cerberus Capital Management and its partners had used the increased rent to finance the buyout.[22]
Liquidation
Although the company attempted to undergo reorganization under bankruptcy, Mervyn's ultimately succumbed to the ongoing
In a KPIX-TV interview on February 11, 2009, Mervin Morris's son Jeff revealed that the family had bought the Mervyn's name and intellectual property, including the company's customer list[6] as 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. In 2009, the Mervyn's website was replaced with a single-page site allowing visitors to sign-up for a mailing list to receive updates about the future of Mervyn's. However, that page is no longer accessible, and the website no longer exists.
Legacy
A street named Mervyn's Drive still exists in La Habra, California, as a Mervyn's location was there prior to 2008.[26]
See also
References
- ^ Swartz, Angela (10 September 2021). "Mervin Morris, founder of Mervyns stores, Atherton resident dies at 101". The Almanac. Retrieved 30 December 2021.
- ^ Top 100 Retailers: The Nation's Retail Power Players (PDF) Archived August 8, 2007, at the Wayback Machine, Stores, July 2006.
- ^ Mervyns.com Store Locator Archived 2016-03-04 at the Wayback Machine
- ^ a b "Mervyn's Stores Plan To Liquidate, Cease Operations". KPIX-TV (CBS 5). October 17, 2008. Archived from the original on October 17, 2008. Retrieved 2008-10-22.
- ^ Sale Motion filed with the United States Bankruptcy Court, District of Delaware
- ^ a b "Morris Family Retakes Mervyn's Name, May Make Comeback". 2009-02-11. Archived from the original on 2009-04-15.
- ^ "Mervyn's founder shares his story". East Bay Times. July 16, 2005.
- ^ Advertisement, Los Angeles Times (Orange County edition), Sept. 7, 1975, p.OC16.
- ^ Emily Thornton, "How Private Equity Strangled Mervyn's", Business Week, November 26, 2008
- ^ Parisian to open in Mervyn's spot at North Point, Atlanta Business Chronicle, April 4, 1997
- ^ "Mervyn's: New California theme is intended to boost sales, profits". The Spokesman-Review. Retrieved 8 June 2013.
- ^ "10 Jun 2004, Page A1 - Star Tribune at Newspapers.com". Star Tribune (Minneapolis - St. Paul).
- ^ "Struggling Mervyns Will Close 62 Stores as It Slashes 4,800 Jobs". The Sacramento Bee. 8 Sep 2005. p. D2. Retrieved 2020-10-21 – via Newspapers.com.
- ^ "Mervyn's prepares to close GJ store". The Daily Sentinel. December 27, 2007. Retrieved December 30, 2007. [dead link]
- ^ "Mervyn's face financial squeeze". The Associated Press (via The Arizona Republic). July 21, 2008. Retrieved July 21, 2008.
- ^ "Mervyn's may be forced to file for Chapter 11: report". CBS MarketWatch. July 21, 2008. Retrieved July 21, 2008.
- ^ "Mervyn's Chapter 11 Petition" (PDF). PacerMonitor. Retrieved 15 June 2016.
- ^ Maestri, Nicole (July 29, 2008). "Mervyn's says files for Chapter 11 bankruptcy". Reuters. Archived from the original on September 22, 2017. Retrieved July 29, 2008.
- ^ a b c "Mervyn's announces select store closure as part of reorganization". Mervyn's, LLC. 2008-08-13. Archived from the original on 2016-03-12. Retrieved 2008-08-18.
- ^ "Mervyn's department stores exiting San Antonio". Bizjournals.com. 2008-08-14. Retrieved 2008-08-28.
- ^ "Mervyn's Company Backgrounder". Mervyn's, LLC. 2008-02-01. Archived from the original on 2008-08-02. Retrieved 2008-08-28.
- San Diego Union Tribune. October 8, 2008. Archived from the originalon October 31, 2008. Retrieved October 8, 2008.
- ^ Sale Motion filed with the U.S. Bankruptcy Court, District of Delaware.
- ^ "MERVYNS COMMENTS ON COURT APPROVAL OF GOING OUT OF BUSINESS SALES" (Press release). Hayward, CA: Mervyns. October 30, 2008. Archived from the original on December 11, 2008.
- Orange County Register.
- ^ "Meryvn's Dr". Google Maps.
External links
- Media related to Mervyn's at Wikimedia Commons