Mervyn's, Linens and Things on their way out

McALLEN - Two big retailers are calling it quits, just as the holiday shopping season begins. 

Blaming the economic downturn and slumping sales, California-based Mervyns announced Friday that it would close all locations after the season, including the three Valley locations in Harlingen, Brownsville and McAllen.

The abrupt announcement followed a Chapter 11 bankruptcy protection filing in July.

Chapter 11 is the most common form of bankruptcy, freeing a company from the threat of creditors' lawsuits while it reorganizes its finances. The debtor's reorganization plan must be accepted by a majority of its creditors.

After 59 years in business, the retailer expects to close its 149 remaining stores after the holiday, according to a press release. Before filing for bankruptcy the retailer had 175 stores in seven states.

Both the Harlingen and McAllen locations were opened in 1992 while the Brownsville store was opened in 2006, a spokesman said.

The retail giant's closeout sale is expected to begin Nov. 1, store personnel said.

As the nation's economic woes deepened, retail sales have fallen at their fastest pace in three years; many other area stores have said their business has also slumped.

Linens-N-Things began a liquidation sale Friday at its McAllen location, joining the bankrupt Mervyns as the latest high-profile victims of the dismal global economy.

The New Jersey-based company had hoped to salvage its Valley store even after it declared bankruptcy in May but was unable to find a buyer, even for its more profitable operations, said spokeswoman Susan Kenney.

Since filing for bankruptcy, the retailer has been closing stores, firing employees and liquidating merchandise. Earlier this month a U.S. bankruptcy court judge gave the retailer permission to shut its 371 remaining stores, including 41 in Texas.

Six companies that specialize in retail liquidations have spearheaded the sales and have promised in court that the retailer will collect about $511 million from the liquidation.

Before filing for bankruptcy, the retailer had 589 stores and more than 15,000 employees. Both the store's manager and a company spokeswoman refused to disclose how many people are employed at the McAllen location.

Yet while the news is frightening for retailers and their employees, shoppers stand to benefit from the deep discounts and bountiful bargains.

At the Linens and Things at 1316 E. Expressway 83 Monday afternoon, an abundance of merchandise crowded the store's floor as red signs advertised sales from 10 to 30 percent off all merchandise.

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Sean Gaffney covers business, the economy and general assignments for The Monitor. He can be reached at (956) 683-4434.