Mervyns to Slim Down
Haywood, Calif., Mervyns LLC plans to close 62 underperforming stores and lay off 4,800 workers as its streamlines operations and focuses its efforts on high-growth markets in the West and Southwest. The closings will leave the company with 193 stores in 10 states.
By February 2006, the chain will exit the Michigan and Oklahoma markets and parts of Texas, Colorado and Louisiana. It will also close a store in Oregan, one in Utah and one in Southern California, along with two distribution centers.
The stores slated for closure have not been profitable for years and are a significant drain on the company’s bottom line, Mervyns said. Although they comprise about 25% of all Mervyns stores, they represent only 17% of total sales.
Target Corp. sold Mervyns last year to a private-investment consortium.
Feds Approve GameStop, Electronics Boutique Merger
Grapevine, Texas, The Securities and Exchange Commission (SEC) approved the proposed $1.4 billion merger of video-game retailers GameStop Corp. and Electronics Boutique Holdings Corp. The two companies will seek shareholder approval of the merger on Oct. 6.
The merger would give the combined company more than 3,200 stores in the United States and 600 internationally.
Retailers Step Up Hurricane Relief Efforts
New York City, Retailers continued their efforts to lend aid to the victims of Hurricane Katrina. Target Stores announced it would waive fees, payments and finance charges for Target Visa card and Target Red cardholders from the affected areas for the months of September and October. In addition, during those two months, no finance charges or will be assessed and no late charges will be charged.
Target is also reaching out to its employees in the impacted areas. Similar to Wal-Mart Stores, Target is offering positions for employees in the affected areas at any Target store nationwide.
In other developments:
•Rite Aid has sent three mobile pharmacy units to affected areas to provide prescription and pharmacy services. The chain is setting up shelters for its associates in the affected areas. The shelters are equipped with running water, cots for sleeping, cooking areas, portable showers and toilets. The chain is offering transportation to and from the shelters as needed. Thirty-four Rite Aid stores are closed due to the hurricane, the majority in the greater New Orleans area.
•CVS/pharmacy is setting up emergency pharmacy units in impacted areas along the Gulf Coast.
•Federated Department Stores has begun an internal fundraising drive among its more than 240,000 associates nationwide. All employee contributions made to the designated relief organizations will be matched on a dollar-for-dollar basis. The company is also matching customer donations. Federated is offering food, water and other transitional assistance to its 500 employees in the affected areas. It is responding to requests from employees for immediate assistance, based on need.
•From Sept. 11-14, Kohl’s stores nationwide will collect gently used clothes and shoes for Kids in Distressed Situations (K.I.D.S.), a national charity that delivers apparel to disadvantaged children. All of the clothing contributions will be used to assist in hurricane relief efforts. As an added incentive, every donor will receive a coupon worth 15% off their next purchase at Kohl’s.