California-based department store chain Mervyns, which last month filed for Chapter 11 bankruptcy protection, has been granted final approval for its $465m debtor-in-possession (DIP) financing facility by the US Bankruptcy Court for the District of Delaware.

The DIP financing is being provided by a group of lenders led by Wachovia Capital Finance Corporation (Western) for restructuring of the US retailer, and received interim approval on 31 July.

As previously announced, Mervyns will shut 26 stores by late October or early November this year, with closures scheduled to begin on this month.

Meryns CEO John Goodman said: "The court's approval of our DIP financing is a significant step in our reorganisation process and one we are pleased to have accomplished.

"Our DIP financing provides Mervyns with the liquidity and stability it needs to continue serving our customers and meeting our obligations to vendors. With this final DIP financing in place and our financial position now strengthened, we are able to maintain our operations while continuing our discussions with creditors as we focus on emerging from bankruptcy."

When Mervyns filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware on 29 July, it joined Boscov's, Steve & Barry's, Shoe Pavilion and Goody's - who have also filed for bankruptcy in recent months.

All are casualties of the spending slump that has seen consumers cut back on discretionary spending amid rising fuel and food costs in the US.