Mervyn's headquarters lays off workers

October 7, 2008 12:00:00 AM PDT
A painful blow came Tuesday for one of the nation's most popular discount retail stores. Mervyn's, handed out pink slips to its corporate employees at their headquarters in Hayward.

The long faces filed out of Mervyn's corporate headquarters in Hayward.

"This is something that hopefully is going to make us stronger and tougher as a company," said Roy Berces, a Mervyn's spokesperson.

The 59-year-old department store filed for bankruptcy in July. Tuesday it laid off an undisclosed number of employees at its highest levels.

"It's unusual for a company to start with major cuts at the headquarters," said Professor Harley Shaiken, who specializes in labor issues at U.C. Berkeley. "The higher paid people are generally at the headquarters and I suspect they're going for the money. They want to save it tomorrow. What happens the day after tomorrow they're planning to confront at that time."

Still, Shaiken says the downside to that is that many of those at the top have the knowledge to get the company out of bankruptcy.

Four Mervyn's stores in the Bay Area are already in liquidation. Stores in Napa, Fairfield, Antioch and Livermore will all be closed by the end of November.

Mervyn's says it plans to close 26 stores, nationwide. That means as many as 3,000 store workers will be headed for the unemployment lines. Discount stores, like Mervyn's traditionally thrive during downturns in the economy.

"Look at the parking lot out here. There's not even any cars out here. Usually you have to park way far to get a good parking place. I was the first person in line here. That's unbelievable. It really really is," said Carleen Butz, a Mervyn's shopper.

"We're looking at some very troubling signs. Of course, there's always the specific issues of a company, but when discounters are going bankrupt in hard times, it means that the pain is spreading very fast into the productive sectors of the economy," said Shaiken.

The crisis at Mervyn's, he says, is a strong indicator that we have a very troubled economy.


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