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Mervyns gets green light to go out of business

October 31, 2008

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Hayward, Calif.--Regional retailer Mervyns LLC announced this week that the court has authorized the company to hold going-out-of-business sales at its remaining 149 stores.

According to a release on Business Wire, Mervyns' creditors' committee withdrew its motion to liquidate the company's assets under Chapter 7 of the U.S. Bankruptcy Code and its objection to the company's proposed going-out-of-business sales.

Given this, the court gave the go-ahead to Mervyns to liquidate its approximately $900 million in inventory.

According to the release, the sales will begin immediately to attract shoppers looking for heavy discounts heading into the holiday season, and should last about eight weeks, with some stores closing sooner.

In addition to receiving the OK for store-closing sales, the court has approved Mervyns request to obtain liquidator Great American Group to assist in conducting the going-out-of-business sales.

The court also approved Mervyns' request to honor its accrued vacation policies to all employees, including those already terminated, upon full repayment of its debtor-in-possession financing.

The company stated, "We are pleased that today's decision will allow for the continued employment of many Mervyns employees through the holiday season. In addition, we now expect that if we meet out performance objectives, we will be able to pay our associates their accrued vacation compensation as originally planned before the court injunction last week."

Hayward, Calif.-based Mervyns has been in business since 1949 and, prior to bankruptcy, operated 175 stores in seven states in California and the Southwest.

In addition to jewelry, its selection included clothing, footwear, bedding, furniture, beauty products, electronics and housewares.

On National Jeweler's 2008 list of $100 Million Supersellers, Mervyns ranked No. 39 out of 39, with an estimated $125 million in jewelry and watch sales in 2007.
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