The company, which had been languishing for several years, said that all of its 175 stores will remain open (including six in Utah) for the time being and business will continue as it reorganizes. Privately held Mervyns operates mainly in California, and has seen its sales drop further because the state is among the hardest hit by the real estate slump.
''Mervyns needs to reorganize its operations due to the state of the economy and difficult operating environment for our industry,'' Chief Executive John Goodman said in a statement.
The chain has been shuttering stores and leaving states such as Oregon and Washington since 2005, after a consortium of private equity players that include Sun Capital Partners Inc. bought Mervyns from Target Corp. for $1.2 billion.
Mervyns, along with some affiliates, filed for Chapter 11 protection Tuesday from its creditors in U.S. bankruptcy court. According to court documents, Mervyns listed liabilities and assets of $500 million to a $1 billion each, with Levi Strauss & Co. as its largest unsecured creditor.
Company spokesman James Golden said it was premature to discuss layoffs.
Tuesday's announcement follows a slew of bankruptcy filings from retailers in recent months and marks the latest challenge to the nation's malls, which are seeing increasing vacancy rates. Earlier this month, Steve & Barry's LLC, once a growing force in low-priced fashion, filed for Chapter 11. The list also includes home furnishings chain Linen 'n Things Inc., catalog retailer Lillian Vernon Corp. and specialty retailer Sharper Image Corp.
Also on Tuesday, the Bennigan's and Steak & Ale restaurants owned by Metromedia Restaurant Group, which operates in many mall locations, filed for Chapter 7 bankruptcy liquidation.
Mervyns' filing didn't come as a surprise to the industry. The 59-year-old chain has been squeezed between high-end department stores and discounters such as Wal-Mart. In April, it appointed Goodman, who had been president and general manager of the Dockers brand - a key supplier to Mervyns - as president and CEO.
The chain's heavy concentration in California has made a turnaround harder, Sun Capital acknowledged in a statement on Tuesday.
The private equity firm, which has interests in turnaround candidates such as retailer The Limited Brands Inc. and apparel maker Kellwood Co., as well as struggling automaker Chrysler and GMAC Financial Services, said it was clear when it acquired Mervyns that it was a ''high-risk turnaround.''
The department store chain has six stores along the Wasatch Front:
* Salt Lake City: Brickyard Plaza
* Sandy: South Towne Center
* West Valley City: Valley Fair Mall
* Ogden: Newgate Mall
* Layton: Layton Hills Mall
* Orem: 601 E. University Parkway
Questions and answers
What does the
announcement mean?
Struggling Mervyns filed for Chapter 11 bankruptcy protection as part of a plan to restructure its operations. The company did not identify any stores that might close.
Is Mervyns going out of
business?
The company said it is committed to restructuring and successfully emerging from bankruptcy protection.
