Mervyns face financial squeeze

In April, Mervyns appointed John Goodman, who had been president and general manager of the Dockers brand--a key supplier to Mervyns--as president and chief executive. The company announced the next month that it had hired a real estate advisory firm to sell five to 10 underperforming stores that also had high real estate value. Mervyns said then that the move was expected to generate $25 million to $50 million in cash to fund operations and new growth.

The financial struggles of Hayward, Calif.-based Mervyns are another worry for the nation's malls, which have seen more and more vacancies amid store bankruptcies and closings. On July 9, Steve & Barry's LLC, once a growing force in low-priced fashion, filed for Chapter 11 bankruptcy protection. At the time, company officials said no decision had been made about possible store closures.

It joins home furnishings chain Linen 'n Things Inc., catalog retailer Lillian Vernon Corp. and specialty retailer Sharper Image Corp. in filing for bankruptcy protection this year. Sharper Image, which is now being liquidated, is selling its remaining assets to an investment group for $49 million.