(Adds details about Cerberus in paragraph 4)
NEW YORK, July 20 (Reuters) - Department store chain Mervyn’s LLC is fighting for survival after a lender pulled financing and some vendors stopped shipments, the Wall Street Journal reported on its website on Sunday.
The company has been trying to persuade vendors to send shipments for the back-to-school season, but if they don’t agree, the chain may have to file for bankruptcy soon, the paper said in a report citing unnamed sources.
A private investment group including Sun Capital Partners Inc, Cerberus Capital Management, Lubert-Adler and Klaff Partners LP bought Mervyn’s from Target Corp (TGT.N) in 2004.
Cerberus sold out of the chain last year but retained a 15 percent interest in the real estate, a source close to Cerberus said. The Journal reported that when private equity bought the company they structured the $1.2 billion deal as two separate transactions — one for the retailer and a second one for the retailer’s real estate.
CIT Group Inc (CIT.N) stopped providing financing to the retailer in the spring, the paper reported.
Mervyn’s and CIT could not immediately be reached for comment.
The Journal said the chain’s private-equity buyers did not stand to lose much from a liquidation of the company because of the way they originally structured the deal. (Reporting by Paritosh Bansal, Editing by Kim Coghill)