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Spokane, Washington  Est. May 19, 1883

Mervyns to cut 62 stores, 4,800 jobs

Compiled from wire reports The Spokesman-Review

San Francisco Long-struggling retailer Mervyns LLC plans to close nearly a quarter of its stores and lay off 4,800 employees in an attempt to cut the chain’s losses.

The Hayward, Calif.-based company said Wednesday it will close 62 stores in eight states, with the bulk of the cutbacks concentrated in Texas and Michigan. The streamlining also will close stores in Oklahoma, Colorado, Louisiana, California, Oregon and Utah, as well as two distribution centers in Texas and Utah. The closures will be completed by February.

All the affected stores, which generated just 17 percent of Mervyns’ sales, were losing money, Mervyns said.

“This was life-and-death for them,” said George Whalin, president of Retail Management Consultants in San Marcos, Calif. “They had to make some moves to make this thing profitable.”

Mervyns has been steadily losing market share to more nimble competitors for years. Frustrated with the chain’s meager returns, Target Corp. sold Mervyns last year for $1.65 billion to a group of investors that includes Sun Capital Partners, Inc., Cerberus Capital Management LP and Lubert-Adler and Klaff Partners LP.

About 1,200 full-time employees and 3,600 part-time workers will be laid off because of the closures, the company said.

Albertson’s earnings up 3 percent

Boise Albertson’s Inc., the nation’s second-largest supermarket chain, said Wednesday its second-quarter earnings edged up 3 percent from last year, but the results failed to meet Wall Street’s expectations.

However, the company, which last week said it was considering putting itself up for sale, reaffirmed guidance for the full year that was in line with analyst targets.

Second-quarter net income rose to $107 million, or 29 cents per share, from $104 million, or 28 cents per share, a year ago. Earnings from continuing operations totaled $110 million, or 30 cents per share, down from $125 million, or 34 cents per share, last year.

The results missed analysts’ consensus forecast for profit of 34 cents per share on sales of $10.3 billion, according to a poll by Thomson Financial.