Castagna Will Try and Turn Mervyn’s Around
By George Anderson
When it was owned by Target, there was a belief at Mervyn’s that the chain was getting the ugly stepchild treatment.
Retail strategist Tom Kelley, a former public relations executive at Mervyn’s, told the East Bay Business Times, “Both Mervyn’s and Marshall Field’s got lost in the shuffle at Target. Both brands really deteriorated as a result.”
It was in this “deteriorated” state that an investment group of Cerberus Capital Management, Sun Capital Partners Inc. and Luber-Adler/Klaff and Partners LP bought Mervyn’s from Target last summer.
With the announcement last week that Vanessa Castagna, the former chief executive of JCPenney’s stores, catalog and Internet businesses, is taking over as chairwoman at Mervyn’s, there is hope the department store chain will get the kind of attention required to turn its lagging business around.
Ms. Castagna has been given much credit for a similar turnaround achieved when during her five years at Penney.
George Whalin, president of Retail Management Consultants and RetailWire BrainTrust panelist, said, “She’s as good a choice as you could make; a first-class executive who truly understands merchandising.”
“The most important thing she needs to do is make the store’s products more fashionable and desirable, which is exactly what she did at JCPenney,” he said. “Mervyn’s has the same customers as Penney’s, so she really knows how to appeal to those shoppers.”
Will Ander, senior partner at McMillan-Doolittle’s retail strategy firm, also gives Ms. Castagna high marks but isn’t sure if even she can overcome some of the obstacles he sees ahead for her at Mervyn’s.
“She’s a strong leader and very good at merchandising, but I’m not sure what strategy will work here,” he said. “Mervyn’s does not have a clearly differentiated position in the market and is second best to retailers like Target and Kohl’s. Its top-line numbers continue to go downhill, so there’s not a strong reason for the store to continue to exist.”
There is also a question of whether Ms. Castagna will be given the time necessary to right the ship at Mervyn’s, he said. “These investors do not have a 10-year outlook for this chain. They’re in the business of getting a return on their investment, so they are probably looking for a turnaround in three to five years. I don’t think they’re in it for the long haul to develop a sustainable, healthy company.”
Moderator’s Comment: What will Vanessa Castagna need to do as chairwoman of Mervyn’s to get the retailer turned around? –
George Anderson – Moderator