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HAYWARD, CA-Under a new strategic business plan, Mervyns is closing 62 underperforming stores, which represent “a significant drain on the company’s overall profitability” in order to focus on more profitable locations. According to a company statement, the shuttered stores make up nearly 25% of all Mervyns’ stores, but only generate 17% of total sales.

The company says it plans to exit the Michigan and Oklahoma markets, as well asparts of Colorado, Louisiana and Texas, by February 2006. It will also close three stores, one each in Southern California, Oregon and Utah and two distribution centers, one each in Plano, TX and West Valley, UT. Until that time, the stores will remain in operation, with new merchandise arriving at the stores throughout the fall and holiday seasons. A total of 1,200 full time and 3,600 part-time positions will be affected by the closures.

Mervyns is planning to shift its resources to high-growth West and Southwest markets where it currently operates 193 stores in 10 states. Specifically, the company is increasing its investment in California, Washington, Oregon, Idaho, Nevada, Utah, Arizona, New Mexico and parts of Colorado and Texas. The discount retailer plans to make improvements to existing store operations, refurbish several units, and implement new technology and systems throughout the company. Additionally, the company is looking to open new stores in locations that will “benefit its business, customers and the community.”

“Concentrating resources on our stores in the West and Southwest will allow Mervyns to be more competitive and to serve our customers and communities better than ever,” said Vanessa Castagna, executive chairwoman of the Mervyns’ board of directors, in a statement. “The new business strategy will enable us to invest in the future, improve our merchandise, facilities and the overall value we offer shoppers.”

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