Bankruptcy

Financial Crises Hits the Retail Sector

By J. Michael McBride

The meltdown of the financial market continues to impact other sectors as the credit crisis perpetually worsens. One of the most recent companies to succumb to the credit crunch is Mervyn’s, a 59 year old department store with over 149 locations across California and the Southwest that filed for Chapter 11 bankruptcy in July. Due to the unavailability of financing, the company will offer deep discount sales during the holidays in an effort to attract customers and liquidate assets. “We are disappointed with this outcome,” said Mervyn’s Chief Executive John Goodman. “Although we took a number of steps to improve our financial performance, we were unable to return the company to profitability.” Sadly, the problems of increasingly unavailable financing has hit department stores across the spectrum. During uncertain times in the economy department and apparel stores often find themselves the hardest hit as customers seek to limit unnecessary spending especially during the holiday season. With the upcoming year forecasted to be the worst holiday season for department stores in 17 years, the future remains bleak for this sector of the economy.

http://www.marketwatch.com/news/story/mervyns-liquidate-hold-going-out/story.aspx?guid=%7BBB88ECC3-0212-425A-AFAE-DB2BA1BCD62F%7D&dist=msr_1

Full post as published by Texas Lawyer Blog on October 20, 2008 (boomark / email).