Mervyns

About Mervyns

Mervyns was a mid range department store chain that filed for Chapter 11 bankruptcy on July 29, 2008. Mervyns had been acquired in a 2004 leveraged buyout by Sun Capital Partners, Cerberus Capital Management, and Lubert Adler for 1.65 billion. The LBO partners separated the real estate from the retail operations, then charged Mervyns above market rent. The arrangement drained cash from operations. Sun Capital and Cerberus extracted approximately 200 million in special dividends. Mervyns liquidated in January 2009 after failing to find a buyer. Approximately 30,000 employees lost their jobs. The Mervyns case became a prime example of private equity destroying a company through asset stripping and excessive leverage. Employees sued but recovered little.