SAN FRANCISCO - Regional U.S. department store chain Mervyn's LLC, which is restructuring following bankruptcy protection this summer, has cut a "significant" number of corporate jobs at its headquarters, a spokesman said on Wednesday.
The privately held retailer has been hit by a housing downturn that affected shoppers living in its base of Western states. It said the job cuts came from all areas in its Hayward, California, headquarters, including finance, marketing, and store operations.
"We are confident that further cost reduction will put Mervyn's in a better position to return to profitability," said Chief Executive John Goodman in a statement.
In August, the company said that 26 of its 176 stores would be shuttered by November. To fund the chain's ongoing operations, Mervyn's received debtor-in-possession financing of $465 million in July from a lender group led by Wachovia Capital Finance Corp.
Mervyn's was sold in 2004 by Target Corp to a private investment company formed by affiliates of Sun Capital Partners Inc, Cerberus Capital Management LP and Lubert-Adler and Klaff Partners LP.
Cerberus sold out of the chain last year, but kept a 15 percent interest in its real estate holdings.
Last month, Mervyn's sued the consortium of private-equity owners, saying the firms stripped out real estate and then leased it back to Mervyn's at higher rates, which forced the company into bankruptcy.
(Reporting by Alexandria Sage, editing by Gerald E. McCormick)
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