HAYWARD, Calif.–As expected, Mervyns filed for bankruptcy today, seeking to restructure the company’s debt and realign its business operations.
In conjunction with the filing, it received a commitment for a $465 million debtor-in-possession facility, which, upon court approval, will fund the company’s ongoing operations.
“Mervyns needs to reorganize its finances and operations due to the state of the economy and difficult operating environment for our industry,” said John Goodman, chief executive officer. “After careful consideration of available alternatives, the company’s management board determined that a Chapter 11 filing was a necessary and prudent step that allows us to operate our business without interruption as we seek to restructure our debt and other obligations in a controlled, court-supervised environment.”
The 59-year-old, midtier department store chain has more than 175 locations in seven states.
In 2004, Target Corp. sold Mervyns to private-equity firms Cerberus Capital Management and Sun Capital Partners, as well as three other partners.