Foreclosures Compel Departmental Store Chain To File Bankruptcy
September 11th, 2008
Foreclosures are having the last say and have compelled Mervyn chain of departmental stores to file for bankruptcy. It is symptomatic of a deep malaise in the heart of the economy and does not bode well for the community. The bankruptcy of Mervyn is throwing a challenge to the cities.
The announcement from Mervyn that it is filing for bankruptcy (Chapter 11) is like another bad wave following on the heels of inflation and unemployment. As it is the shores of California are battered by foreclosure – this being the latest foreclosure related victim.
Mervyn is based in California and most of its retail outlets are here. This makes it akin to the canary testing the poison on the coalmine of the California’s economy. It is symptomatic of the deep trouble awaiting the state. For the present Mervyn will continue to run its 175 shops but the signs are far from good. It seems that the shops are just a weak festive season away from downing shutters.
When the economy begins to stumble the consumers will turn from mid-discount stores to hunt for regular department stores for bargains. Off-pricing stores will also gain in popularity. Another reason for Mervyn’s blues is the competition it has been facing from Kohl when the latter set up shops in California a couple of years ago. The question is whether foreclosures are pressurizing all mid-level retail markets or this is just the individual story of Mervyn. If it is the former then the fate of Montebello, Monrovia, Alhambra and others are hanging in the balance. In this uncertain position it is best for the managers of city redevelopment to be on the red alert. It is of little comfort to know that other retail chains like Shoe Pavilion and Steve & Barry’s have sought the protection of bankruptcy.
The moving out of a store leaves behind a gaping hole in the mall or shopping enclave. This can turn into a curse – the great foreclosure blight of vacant units that attract crime and disease. Baldwin Park and Temple City have been desperately trying to set up bustling downtowns. For them the vanishing shops will be a great blow.
Mervyn’s loss is a loss for California. The half empty shop shelves and deteriorating service providing shops are sending down shivers of decay. Foreclosures are gnawing into the very soul of urban life surely and steadily.
- Fewer Foreclosures Among Low-cost Brooklyn Homes
- Bank of America is a Lagging Behind in Loan Modifications to Prevent Foreclosures
- The Aftermath of the Housing Boom is Followed by Foreclosure Doom in Homestead
- Lenders Being Legally Challenged for Activating Predatory Lending
- Foreclosures Have Made Life for CEO’s Expensive and Fraught With Fear
- With Foreclosures and Unemployment Continuing it is Doubtful if Recession is Over
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November 24th, 2008 at 10:30 am
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