Sacramento's reeling retail sector took another punch in the gut Friday when Mervyns Holdings LLC announced it is going out of business.
The decision by the mid-level clothing and housewares chain wipes out roughly 15,000 jobs at all 149 Mervyns, most of them in California.
Locally, it means hundreds of jobs lost and the end of donations from a company known locally as a generous giver.
And the company's liquidation dumps roughly 700,000 square feet of empty store space into Sacramento's struggling commercial real estate market. One of the stores that will close isn't even a year old.
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"It's very unfortunate," said Jim Kessler, head of the San Francisco retail development firm that built the new Florin Towne Centre where Mervyns opened in February. "I think there are things impacting the company that are beyond their control."
The credit crisis, plummeting home values – Sacramento is among the nation's worst markets – and higher prices for things like food and gas have put Mervyns and many other retailers on the defensive as consumers trim spending.
"Retail is so slow, it's unbelievable. People around here aren't spending, period," said Boyd Cahill, a longtime retail property broker with TRI Commercial in Roseville. "Everybody is walking around with a cloud over their head, scared like never before."
The average Mervyns store employs about 100 workers, which translates into 900 local retail jobs lost in a single blow. By comparison, the four-county region shed 800 retail jobs in all of September, according to the latest state unemployment statistics.
Mervyns' liquidation also will hurt local community organizations. The company has been known for its charitable giving.
Read the complete story at sacbee.com