department stores: October 2008 Archives

Regional retailer Value City Department Stores filed for chapter 11 bankruptcy and is planning on closing its stores. The chain, which once operated 66 stores, is down to 37 and plans on rapidly closing 26 of them. Value City is owned by VCHI Acquisition Co. It cited the economic downturn and high fuel prices as key factors in the business slide.

A related Value City article on cfo.com noted that Mrs. Fields' Cookies and Goody's are rapidly preparing to exit bankruptcy, a promising sign in an otherwise gloomy retail landscape. Both companies filed for chapter 11 ealier in the year.

In response to the slowing economy, Target is reducing its 2009 expansion. The discount retailer, noting a shift in spending to household basics, is focusing on top-line sales instead of reach.

Regional department store Mervyn's, having previously entered Chapter 11 bankruptcy, is expected to convert to Chapter 7 and proceed with a full liquidation of assets. The chain had already closed 26 stores and put their locations up for sale.

Teen retailer Forever 21 was recently considering a purchase of 150 Mervyn's stores in an expansion move, but no deal was closed.