Mervyn’s Headed Down A Bad Road

The WSJ is reporting tonight that Mervyn”s is headed for trouble:

Mervyn’s LLC, the long-struggling California department-store chain, is fighting for survival as some of its vendors have halted shipments to the company and key lenders have pulled financing, according to people familiar with the situation.

Once again some familiar names are involved”

…Mervyn’s owners. Private-equity firms Cerberus Capital Management and Sun Capital Partners, along with three other partners — including real-estate investor Lubert-Adler — acquired the chain from Target Corp. in 2004 for $1.2 billion. The group put up about $400 million in equity and financed the rest.

Cerberus Capital Management bought GMAC from GM, a majority interest in Chrysler and H&R Block Inc., the largest tax preparer in the U.S., agreed to sell its money-losing subprime home-loan unit (Option One Mortgage Corp.) to Cerberus Capital Management LP at a discount as defaults by the riskiest borrowers surge.

Sun Capital Partners owned Wickes. Enough said.

2 Responses to “Mervyn’s Headed Down A Bad Road”

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