NEW YORK, Oct 17 (Reuters) - Department store chain Mervyns Holdings LLC said on Friday it plans to liquidate its merchandise and auction its store leases. The privately held retailer, which sells clothing and home goods, said it will hold going out of business sales at all of its remaining 149 locations. The Hayward, California-based chain said it hoped selling off its assets during the holiday season would maximize the amount of money it has to pay off creditors.
"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," Mervyns' Chief Executive John Goodman said in a statement.
Mervyns filed for bankruptcy in July, at which time it had 177 stores in seven states, employed about 18,000 people and had annual revenue of about $2.5 billion. The privately held retailer previously announced plans to close only 26 stores by late October or early November and cut about 1,700 workers as it restructured. A U.S. bankruptcy court gave approval in August for a $465 million debtor-in-possession financing facility, to be led by Wachovia Finance Capital Corp.
Mervyns did not immediately respond to a request for comment.
Mervyns sued its former private-equity owners in September, saying the firms pushed the retailer into bankruptcy by selling off its real estate holdings and then leasing them back to Mervyns at higher rates....
(Reporting by Sarah Coffey; Editing by Andre Grenon)