Late on Friday, Oct. 17, the Mervyns department store chain confirmed a plan to close its remaining 149 stores and "wind down" its business, under section 363 of the bankruptcy code. However, it debunked rumors of a Chapter 7 conversion, as it said it would retain an outside professional services firm to assist it in liquidating store inventory and real estate. In the press release, Mervyns said it determined that holding going out of business sales during the holiday season is the best way to maximize value for its creditors. "We are disappointed with this outcome but the company’s declining liquidity position and the extremely challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action,” said John Goodman, CEO of Mervyns. When it filed Chapter 11 bankruptcy in July, Mervyns immediately announced the closing of 26 of its 176 stores -- it now has 149 stores left in the chain in CA (121), AZ (16), TX (7), UT (6), NV (3), NM (3). Hilco Real Estate is the firm charged with the disposition of Mervyns' first phase of closings -- those 26 store leases range in size from 52,828 square feet to 89,693 square feet. According to CoStar Tenant, the typical Mervyn's is 65,000 to 85,000 square feet and serves as an anchor to regional malls. The company's headquarters building in Hayward, CA, is 432,000 square feet. With an average store size of 77,600 square feet, a full liquidation of Mervyn's translates into approximately 13.66 million square feet of retail space being vacated in aggregate during 2008. A full liquidation comes as somewhat of a surprise, as moderately-priced fashion apparel retailer, Forever 21, recently said it had submitted an offer to acquire 149 of Mervyns' remaining stores for an undisclosed amount. Perhaps Forever 21 has been unsuccessful in obtaining financing required to close the deal. Founded in 1949, Mervyns was acquired by Dayton Hudson Corp. (later known as Target) in 1978. In the late 80s, the retailer attempted to expand in the southeast (particularly in Atlanta and Florida) unsuccessfully, closing the stores by 1998. Mervyn's then turned its focus back to California and in late 2004 was sold to a private equity consortium including Sun Capital Partners, Cerberus Capital Management and real estate investment company, Lubert-Adler Management.