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Department store chain Mervyns, which is closing its downtown Crossroads Plaza store in March, probably will close its six remaining Utah stores, as well, commercial brokers say.
On Monday, Mervyns, which closed its Midvale store Dec. 31, said it was closing all of its stores in Oregon and Washington and its Crossroads Plaza location in Utah. Just a few months ago, Mervyns had said the Crossroads store would remain open and would be a part of a extensive redevelopment of the mall and surrounding area by mall owner The Church of Jesus Christ of Latter-day Saints.
"It's not a matter of if they will close all their other stores, but when," said Salt Lake City commercial broker Vasilios Priskos. "It does not make sense to operate in this market with only a few stores and no efficient distribution system."
Priskos is referring to Mervyn's plans to close a 262,000-square-foot distribution center at 2455 S. 3600 West in West Valley in July. He said closing the Utah distribution center makes supplying its Wasatch Front stores with merchandise more onerous and expensive.
The remaining Mervyns stores in Utah are in Salt Lake City at 1154 Brickyard Road and in five malls: Layton Hills Mall, Ogden's Newgate Mall, Orem's University Mall, Sandy's South Towne Center and Valley Fair Mall in West Valley.
Like Priskos, CB Richard Ellis broker Chris Gentzkow said he also does not believe Mervyns will stay in the Utah market over the long term.
For its part, Mervyns through a representative expressed confidence in its Utah locations on Tuesday.
"We are very committed to remaining in the Utah market," said Leanne Furman, Mervyns spokeswoman.
Furman said the remaining Utah stores probably would be served by a distribution center in Fremont, Calif., but she was not sure.
Gentzkow said Mervyns' announcement that it would leave Crossroads is probably a relief to the LDS church. The church fought to keep upscale retailer Nordstrom as part of its efforts to redevelop the ailing mall but "Mervyns isn't Nordstrom," he said. "The church doesn't need them."
Church spokesman Dale Bills declined comment on the Mervyns announcement and refused to answer any questions about the store's lease. "The Church and its redevelopment team are not commenting on Mervyns' announcement that it will close its Crossroads Plaza store," he said in an e-mail.
More than 200 positions will be eliminated after Mervyns closes its Midvale store and the West Valley distribution center. The company said it has 15 full-time and 38 part-time employees at the Crossroads Plaza location but spokeswoman Furman said she expects a number of those workers will transfer to other Utah locations.
She said the company is offering severance pay and outplacement assistance, and will help employees get job interviews at other Mervyns locations and other retailers.
Target Corp. sold Mervyns LLC last year to a private investment group that since has been analyzing ways to improve Mervyns' performance.
As part of its restructuring efforts, Mervyns is exiting a number of markets in which it operates, including Michigan, Oklahoma and Louisiana. It also will exit Oregon and Washington, but the stores there will remain open until March 2007. It also has pared down the number of stores it operates in a number of other states.
Steven Bogden, national director of business development for Coldwell Banker Commercial NRT in Salt Lake City, said he began to think that Mervyns would exit the Utah market after it closed its Midvale location in the key Fort Union area.
"You just don't close a store with such a stellar location unless something is up," he said.