US fashion retailer Mervyns is to hold "going out of business sales" at all of its remaining 149 stores as it begins to wind down its business.

The company said it intends to carry out the process through Section 363 of the US Chapter 11 Bankruptcy Code.

The department store chain, which filed for bankruptcy in July this year, said it had completed a thorough analysis of its options, including the possible sale of the company, prior to its decision to wind down.

In September, Mervyns presented a preliminary strategic plan to its creditors committee, outlining its operational initiatives, cost savings, liquidity position and funding needs to emerge as a reorganised company.

However, John Goodman, chief executive officer of Mervyns, said on Friday (17 October): "We are disappointed with this outcome but the company's declining liquidity position and the extremely challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action.

"Consumers know Mervyns for our style, quality, and great value and we are confident that the deep discounts available through going out of business sales will drive significant traffic in our stores.

"Although we took a number of steps to improve our financial performance, we were unable to return the company to profitability."