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Mervyns to close 20 stores, focus on core markets
17 Jan '06
3 min read
Department store chain Mervyns has revealed it is exiting the Oregon and Washington markets where stores are not meeting overall performance expectations.
These markets contain predominantly low-volume stores with relatively high operating costs, which negatively impact Mervyns' overall profitability. By February 2007, it will close 20 stores -- 19 located in Oregon and Washington and one store in Salt Lake City, Utah.
The move will allow Mervyns to concentrate its investments on existing and new store locations in its profitable core markets in the West and Southwest.
Vanessa Castagna, Executive Chairwoman of Mervyns' Board of Directors, said, "Exiting the under performing markets of Oregon and Washington will allow us to make investments that better serve our customers and Mervyns' future."
"We are confident that these decisions are right for Mervyns' future growth and success, and are consistent with the strategy that we announced in September 2005," Castagna said.
Mervyns officials said the strategy to focus on its high-growth core markets in the West and Southwest announced last year has already shown solid signs of success.
"Customers are shopping with us. They love our merchandise and the value we offer. They are responding to the enhancements we've made to our stores and our increased marketing and promotional events. This response tells us that our strategy is right on track," added Castagna.
The company has delivered seven consecutive months of positive same-store sales results and profitability. The last three months of 2005 show double-digit percentage sales gains, which will result in a strong fourth quarter and overall the company will exceed its sales expectations for 2005.
These markets contain predominantly low-volume stores with relatively high operating costs, which negatively impact Mervyns' overall profitability. By February 2007, it will close 20 stores -- 19 located in Oregon and Washington and one store in Salt Lake City, Utah.
The move will allow Mervyns to concentrate its investments on existing and new store locations in its profitable core markets in the West and Southwest.
Vanessa Castagna, Executive Chairwoman of Mervyns' Board of Directors, said, "Exiting the under performing markets of Oregon and Washington will allow us to make investments that better serve our customers and Mervyns' future."
"We are confident that these decisions are right for Mervyns' future growth and success, and are consistent with the strategy that we announced in September 2005," Castagna said.
Mervyns officials said the strategy to focus on its high-growth core markets in the West and Southwest announced last year has already shown solid signs of success.
"Customers are shopping with us. They love our merchandise and the value we offer. They are responding to the enhancements we've made to our stores and our increased marketing and promotional events. This response tells us that our strategy is right on track," added Castagna.
The company has delivered seven consecutive months of positive same-store sales results and profitability. The last three months of 2005 show double-digit percentage sales gains, which will result in a strong fourth quarter and overall the company will exceed its sales expectations for 2005.
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