HAYWARD, CA-Two days after filing for Chapter 11 protection, Mervyns’ first-day motions were approved by the US Bankruptcy court. The chain has received $465 million in debtor-in-possession financing to continue operations, including paying vendors, employee wages, benefits and other obligations. It also can continue to honor its merchandise returns, outstanding gift cards and loyalty programs without seeking further court approval.

“With the court’s prompt approval of our DIP financing and first day motions, we are moving forward with our reorganization under Chapter 11 while maintaining normal operations in our stores,” said John Goodman, CEO, in a statement. “We are pleased that we can continue to serve our customers, and purchase goods and services from our vendors as we seek to implement strategies to restructure our operations, strengthen our balance sheet and position Mervyns to compete more effectively.” After weeks of speculation, Mervyns, its parent company and a subsidiary filed for Chapter 11 protection, citing $500 million to $1 billion in assets and $500 million to $1 billion in liabilities.

Founded in 1949, the chain went public in 1971, and was acquired by Dayton Hudson Corp. (later Target Corp.) in 1978. By the late 1980s, however, the chain began to struggle as it faced increasing competition, even as it expanded to new regions including the Southeast and Pacific Northwest. By the late 1990s, the company had exited many of its newer markets to refocus on California.

In 2004, Cerberus Capital Management LP, Sun Capital Partners and three other partners including real estate investor Lubert-Adler Management, acquired the chain from Target. More recently, the Macerich Co. and a joint venture of Developers Diversified Realty and Macquairie Trust acquired nearly 80 open and operating Mervyns stores. The company currently operates 176 locations in seven states.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.