One-hundred and forty nine stores around the nation will close -- 37 of them are in the Bay Area, and that means thousands of layoffs.
Mervyns appears to be another victim of the credit crunch. There was a potential buyer, but the buyer was not able to get enough money to acquire Mervyns.
The store in Hayward and its headquarters told employees on Friday that had they been in the same situation a year ago, it would have been a completely different story.
Sandra Randolph told ABC7 News some of her co-workers were still optimistic.
"It's still up, but I guess they'll be worried after today's news," said Randolph.
In a statement, Mervyns' CEO said: "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."
Mervyns had been in financial trouble for some time. In July it filed for Chapter 11.
Pete Bucklin Ph.D. is a marketing professor at U.C. Berkeley's Haas School of Business.
"They were faced in the spring of this year with a cash shortage because it had not been good for them. And their suppliers of cash decided they weren't going to give them any more money," said Bucklin.
"Well it sends you to the suburbs, you got to go to Target or something like that. It's sad particularly because this is the old Sears," said one Mervyns customer.
Mervyns first opened 59 years ago in the Bay Area. Local celebrities promoted the chain retailer. Today, 149 stores will close after the holidays.
The manager of a competing retail store believes Mervyns' departure will impact sales at the Southland Mall in Hayward.
"It's going to impact it as where we will have less families. They closed Hallmark, so I think less families will come here," said Sondra Mascardo.
Mervyns plan now is to have a going out of business sale during the holidays. The company says it's the best way to maximize value for its creditors.
The company sent an e-mail to reporters saying: "Deep discounts available through going out of business sales will drive significant traffic in our stores."
Shoppers greet the news anticipating sales
The situation did not happen overnight, in fact it was about eight years in the making. Even the Mervyn's founder said he saw it coming.
"We love Mervyns!" shouted a group of girls in the Mervyns parking lot.
Mervyn's shoppers are not hard to find, even though the financial books show otherwise. The company is holding a going out of business sale three months after filing for Chapter 11 bankruptcy.
"Have you ever had anyone punch you real hard in the stomach? That's the way I felt," said Mervin Morris, the founder.
Mervin Morris is not only a Mervyn's supporter, he's also the founder.
"That was the original store," said Morris.
He opened the first Mervyns in San Lorenzo, 59 years ago with his life savings. Though he sold the company in 1978, knowing his name sake will be a thing of the past soon is heart breaking, but not totally surprising. He says Mervyns lost direction, as a discount full service retailer, years ago.
"They threw out cosmetics, then they brought it back, the customer just didn't know what to expect at Mervyns, there was no good rudder at that ship," said Mervin Morris.
Decades later, a packed store in the 1950's is how Mervin Morris prefers to remember Mervyns in its heyday not, like this.
"We are going to get some good deals because they're going to have blow out sales, so we'll be here blowing the store out," said Auressia Armstrong, a shopper.
But it wasn't until this morning that employees at Mervyn's headquarters in Hayward, learned of the company's plan to liquidate all of the stores' inventory to pay back creditors. 149 will close after the holiday shopping season.
"I'm coming here to pay my last Mervyns bill," said John Worley, a Mountain View Resident.
Long time customers are bracing themselves for change, but the deep discounts Mervyn's is offering is helping with the transition.
"The way the economy is maybe I don't want to spend any more money than I have to, but then I like a good bargain just like everybody else," said Worley.
There will be a lot of employees affected once the stores close in January. When the store filed for bankruptcy, it had 18,000 employees.