Dec 3, 2008 7:29 pm US/Pacific
Founder Says Mervyn's 'Raped' By Corporate Greed
HAYWARD (CBS 5) ―
-
-
A sign at one of the Mervyn's stores in the Bay Area.
CBS
He's a man whose proudest accomplishment was turning a single store in San Lorenzo into a successful multi-million dollar store chain. And now, as the company goes under, Mervin Morris is speaking out, saying the current Mervyn's bankruptcy is a tragedy.
Morris has been watching with sadness and anger over the past few months the fate of the hundreds of employees laid off from the company he founded. Many of them, as CBS 5 reported, were with the company for decades.
"You had some very loyal employees," CBS 5 asked him in an interview. "We sure did have," he said. "And that is one of the things that made the company, there's no question about it."
At age 88, Morris's memories of the first days of Mervyn's are still clear as a bell.
"That is the opening day of the first store, that's July 29th, 1949," he said, showing off one among his collection of many old photos. As a young man from the small farming town of Delano, near Bakersfield, he put all his savings into a bankrupt men's store in San Lorenzo.
"There was an opening there, because this was a working man's community, blue collar," he said.
And who was the Mervyn's customer? "So the current generation will understand, it was Joe the plumber." From day one he said, business was gangbusters. "We kept expanding. We expanded that first store 13 times in 11 years."
In the late 70's Morris sold the company to Dayton Hudson, the parent company of Target, for $300 million dollars. "They waved numbers at me that this kid from Delano never heard those kind of numbers."
But shortly after that, he said, Mervyn's began its decline, as he said the Dayton Hudson company focused on its Target brand stores, leaving Mervyn's by the wayside.
Four years ago the company was sold to a group of private equity firms, who promised to revive it. Instead Mervyn's alleges in court that those firms stripped the company of its real estate assets, sucked out millions in cash, then rented the stores back to Mervyn's at double the rate.
"You don't think those private equity firms were really interested in running Mervyns stores?" CBS 5 asked him. His response: "I don't think they were. It is greed and it doesn't do our economy any good. Actually it hurts the economy terribly."
The resulting bankruptcy left hundreds of employees stranded.
"These were good people, who had many of them had given their best years to Mervyn's" said Morris.
What makes him even angrier is that one of the equity firms, Cerberus, also the parent of Chrysler, is now asking for a bailout.
"These very people, going to Washington now wanting to get bailed out, after they raped Mervyn's, now they want my dollars to bail them out. In my opinion, it's not right."
Cerberus, the company Morris accuses of "raping" Mervyn's, in response said:
"We are sorry that Mr. Morris feels the way he does. Cerberus did not control the real estate company, but did work with the retail operating company to attract top management talent for its operations. When Cerberus sold its interest in the retail operating company in 2007, the company was successful and profitable."
Meanwhile there's more bad news for Mervyn's former employees. As of two days ago, their 401k rollovers were temporarily suspended. A statement sent Wednesday told employees that due to the "current economic climate" not all the funds are 100-percent available for immediate distribution.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
Click to enlarge
Can A Cat Get Heart Disease? 9 mins ago 
Stumble It!
Reporting
Comments