Mervyns asks for court approval to hire agent to conduct store closing sales at 26 stores

By Jennifer Lanning Drey

Portland, Ore., Aug. 18 - Mervyns LLC requested court approval to hire a joint venture between Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC to conduct store closing sales at 26 underperforming stores, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

The company said it has already engaged in a multi-stage bidding process prior to selecting the Hilco/Gordon Brothers joint venture as the highest bidder for the rights to hold the store closing sales.

Under the proposed agreement, Hilco/Gordon Brothers has guaranteed Mervyns will receive 117% of the cost value of the merchandise included in the sale.

The joint venture will retain any additional proceeds up to 120.5% of the total cost value of the merchandise.

Proceeds above 120.5% will be divided with 70% going to Mervyns and 30% to the agent.

Mervyns said it is critical that the store closing sales begin as soon as possible because the underperforming stores represent a drain on the company's liquidity.

The company has proposed that a hearing be held on Aug. 26.

Mervyns, a San Francisco-based department store, filed for bankruptcy on July 29. Its Chapter 11 case number is 08-11586.

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