MERVYN’SMERVYN’S

Scott and Miguel

HistoryHistory

Founded in 1949 by Mervyn MorrisHeadquartered in Hayward, CA (Bay Area)Emphasis on family

StrategyStrategy

Mid-tier neighborhood department store“Trend-right” fashionsHome DecorNational and private labelFirst to offer revolving creditAmbience of high-end department store

with discount prices for families

Target MarketTarget Market

Working moms 25-49Half of stores located in regional malls, half

stand alone

OwnershipOwnership

Private company Sold by Target Corp for $1.65 billion

– Target was funneling profits out of Mervyn’s and into new Target stores

Sun Capital Partners, Inc.– Private equity firm– Specializes in failing business recovery– Own Sam Goody, Wickes Furniture, Bruegger’s

Bagels, Anchor Blue

DownsizingDownsizing

Generated $3.3 billion in revenues (2003) 2003: 255 stores in 13 states 2006: 190 stores in 10 states Exiting Oregon and Washington entirely in 2007

– 19 low volume stores with high operating costs

Focus on 171 stores in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Texas, Utah

Community RelationsCommunity Relations

ChildSpree– $100 shopping spree for needy children

Sprockets Dog Plush– Sales of stuffed animals funds ChildSpree

CompetitionCompetition

Discounters:– Wal-mart– Target– T.J. Maxx– Ross

Mid-market veterans:– JC Penney– Sears

SWOTSWOT

Strengths– Profitable– Well known– Good community relationship– Have a plan– Free of Target Corp leeches– Establishing unique brands

SWOTSWOT

Weaknesses:– Unstable– Heavy competition from all corners– Must re-establish niche– Bad PR for job loss– Run down stores (pilfering by Target)

SWOTSWOT

Opportunities– New financing– New leadership– Exploitation of new niche

SWOTSWOT

Threats:– Competitors– New plan viability– Loss of brand loyalty

Jobs??Jobs??

Entry level management-– 2004: 300– 2005: 200– 2006: 200

ReferencesReferences

www.collegegrad.comwww.hoovers.comwww.mervyns.comwww.sfgate.com