Watch CBSN Live

Sorry, Forever 21 -- Mervyns Will Liquidate 149 Stores

Two major retailers called it quits this week, as Mervyns announced late today it will end its bankruptcy with liquidation of all 149 remaining stores.

Women's Wear Daily reported today that the Hayward, Calif., retailer â€" once part of Dayton-Hudson and later Target Corp. â€" will use the holidays to move as much merchandise as possible, to the benefit of creditors.

That kills the stalking-horse deal announced just days ago between Mervyns and Forever 21.
"We are disappointed with this outcome but the company's declining liquidity position and the extremely challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action," John Goodman, chief executive officer, said.

The Associated Press adds:

Last month, Mervyns sued the private equity firms involved in the leveraged buyout of the chain from Target, alleging the deal stripped the retailer of its real estate assets, forcing it into bankruptcy.

Mervyns said in the suit that the investment group, which included Cerberus Capital Management and Sun Capital Management, bought Mervyns in 2004, acquired its real estate and leased it back to the company at substantially increased rates. Mervyns says the increased rent was used to finance the buyout.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.