Mervyn’s – What Happened?

Mervyn’s, a middle-scale department store chain founded by Mervin G. Morris in Hayward, California, offered a wide range of products, including clothing, footwear, furniture, electronics, and more. By 2005, it ranked as the 83rd largest U.S. retailer.

In 2008, facing financial challenges, Mervyn’s declared Chapter 7 bankruptcy and liquidated its assets, leading to the closure of all remaining stores by the end of the year. Despite the Morris family’s attempt to revive Mervyn’s as an online enterprise in 2009, the proposed relaunch did not materialize.

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The Beginning of an Era

Founded by Mervin G. Morris on July 29, 1949, the first Mervyn’s store in San Lorenzo, California, initially intended to be named “Mervin’s,” adopted the spelling with a “y” for visual appeal.

Located in San Lorenzo Village, a planned residential community, they focused on a no-frills shopping environment, reducing overhead and offering lower-priced merchandise, including discounted factory seconds. This strategy resonated with suburban families in the 1950s and 1960s.

Despite changes in marketing, Mervyn’s maintained popularity as a cost-effective alternative to national department store chains. The second store, part of the Fremont Hub Shopping Center, opened in 1962, marking the expansion beyond the original location

Expansion

By 1978, Mervyn’s, boasting over 50 stores across three states, was acquired by the Dayton Hudson Corporation (now Target Corporation), maintaining its distinct identity as a subsidiary. Stores had 80–130 employees, including leadership roles and part-time staff with credit goals tied to opening Mervyn’s credit accounts.

In 1988, Mervyn’s entered Florida and expanded beyond California, focusing on Atlanta and Miami in 1991. Further growth involved acquiring Jordan Marsh sites in 1992, entering the southern U.S. market.

Competing with JCPenney for mall space, Mervyn’s experienced changes in store locations, sales to Dillard’s, and withdrawals from Miami and Atlanta in 1997. Throughout the 1990s, Mervyn’s extended its presence to Arizona, Colorado, Texas, Michigan, Minnesota, and Washington State.

Target Corporation

Between 1995 and 2001, Mervyn’s stores underwent rebranding as “Mervyn’s California” to emphasize their West Coast roots. Despite a media campaign with Joe Montana, the rebranding had minimal impact on revenues, leading to the removal of “California” from the name in 2001. The majority of Texas stores did not adopt the “California” addition.

In March 2004, Target Corporation announced the sale of Mervyn’s and Marshall Field’s divisions to focus on Target stores. Target rejected offers valuing Mervyn’s for its real estate alone and sought deals preserving the company and jobs for its 30,000 employees.

In 2004, Mervyn’s locations in Minnesota closed as part of a deal between Target Corporation and The May Department Stores Company, which purchased Twin Cities area Mervyn’s locations along with Marshall Field’s stores.

In July 2004, Mervyn’s was sold to investors including Sun Capital Partners, Cerberus Capital Management, and Lubert-Adler Management Inc., with Rick Leto appointed as the new president and chief merchandising officer in January 2005.

Mervyn’s: The End

Despite attempts at reorganization during bankruptcy, they succumbed to the impact of the ongoing Great Recession. The company decided to liquidate its assets through Chapter 7 bankruptcy, deeming it the best course to maximize value for creditors, employees, and stakeholders.

This led to the closure of all remaining stores. Initially, Forever 21 sought to purchase 149 stores, but negotiations failed, resulting in the liquidation of all 149 stores.

Subsequently, Kohl’s and Forever 21 successfully secured a joint bid at a bankruptcy auction, taking over the leases of 46 stores, with Kohl’s assuming 31 and Forever 21 taking over 15.

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