Orange County Register

Mervyn’s may file for bankruptcy protection, according to The Wall Street Journal and Women’s Wear Daily.

Mervyn’s has more than 175 locations in seven states, including at least 13 stores in Orange County. 

The WSJ, citing unnamed sources familiar with the situation, wrote that some of Mervyn’s vendors have stopped shipments to the company and key lenders have pulled financing. Mervyn’s executives have been trying to convince vendors to ship merchandise to the retailer for the important back-to-school season. If that effort fails, the company could be forced to file for bankruptcy protection as soon as this month and shut down.

Also, WWD wrote that industry speculation focused on the possibility of a bankruptcy filing by Mervyn’s. 

According to a Mervyn’s statement in May, the retailer said it planned to close five to 10 underperforming stores.

The company hired DJM Realty to sell off the underperforming stores with high real-estate value. The sale was expected to generate $25 to $50 million in cash to fund operations and new growth initiatives.

Also in May, Mervyn’s said it planned to open five new stores in core markets in 2009. In late June, Mervyn’s said it won’t be releasing info on store closures and openings until much later this year. 

(Photo from Mervyn’s Web site.)

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