Officials at Sun Capital, the Florida-based investment firm thatbought Musicland a year ago from Best Buy Co., insist they willoperate it as an independent retail chain. A recent UnitedProperties commercial real estate report quoted "market observers"as saying, "The struggling Mervyn's chain will not likely be soldas a continuing business." The observers expected an acquisitionwould likely be a retail play for redevelopment or reuse by otherbig boxes like Kohl's or Best Buy.

But Target did not want to take the piecemeal approach, and hadas a key goal to sell it essentially whole, says Target spokeswomanCarolyn Brookter. Still, it remains an open question how Mervyn'swill fare under its new owners, says Eric Beder, a securitiesanalyst at J.B. Hanauer & Co. Beder wonders how many stores thenew owners will close or what they will eventually do with theassets.

"They are financial buyers," Beder says. "In the end, they needa financial event." Such events could include a public stockoffering, a sale of the chain or a liquidation of the assets.