Shanna Stubbs of Provo, a patron of Mervyns in Orem for the past 13 years, was dismayed to learn of the pending closure of her favorite store -- one of a growing number of retail obituaries in the face of the worsening economic downturn.

"That's terrible," she said. "I'm not a big shopper. But when I shop, I shop here because of the good deals. The store is close to my home and I don't have to walk through the mall to get in here."

The Orem store, which opened in 1981 at the University Mall, is one of Mervyns's 149 remaining stores that will be liquidated by early next year following the company's Chapter 11 bankruptcy protection filing in July. The Hayward, Calif.-based chain said liquidation sales during the holiday season were the best way to maximize value for the company's creditors after exhausting all its options, including the sale of the company.

Mervyns, which has six stores in Utah, operates mainly in California -- where it has more than 125 stores -- and has seen its sales slump as the state is among the hardest hit by the housing downturn and slowdown in consumer spending. Compounding the situation is declining liquidity.

"Without getting an investor in, there's no opportunity to pursue any other recourse," said Roy Berces, group manager of communications for Mervyns. "We've been feeling the effects of the real estate slump in recent years, and with the cascading situation with the economy suffering from increased energy and food prices, retailers have been hit hard by all those factors."

Berces could not specify how many Mervyns workers in Utah will be laid off, or when the stores will close. Mervyns has stores in Sandy, Salt Lake City, West Valley City, Ogden and Layton.

On average, there are between 80 and 125 employees per store, he said. The company, which had 175 stores in seven Western states at the time it filed for bankruptcy, is closing 26 stores this month and the remaining 149 by January. Liquidation sales started on Sat. and will continue through the end of the year.

For Summer Clark, who has been working at the Orem store since she was 16, Mervyns's closure marks the end of a special tradition she shares with her mother.

"My mum works at Mervyns at the South Towne mall. She's been bringing me to "Take Our Daughters and Sons to Work" days at Mervyns since I was five years old," she said.

Mervyns Founder Mervin G. Morris opened his first store in 1949 in San Lorenzo, Calif., expanding his original store 13 times before opening additional stores in 1964, according to the company's Web site. Mervyns went public in 1971, and in 1978 merged with Dayton Hudson Corp., now Target Corp. Mervyns was sold to a private investment group in September 2004.

In August, Mervyns secured $465 million in funding from investors, allowing the company to resume paying its vendors, many of which had reportedly stopped supplying merchandise to the retailer before its bankruptcy was declared. In a list of Mervyns's 30 largest creditors filed in July in U.S. Bankruptcy Court for the District of Delaware, Mervyns owed Levi Strauss & Co. the greatest sum -- more than $12.7 million.

Subhead: Who's replacing Mervyns?

But while many shoppers and University Mall stores are sad to see Mervyns go, most also wonder what will replace the 94,000 square foot space at the Orem mall, and how long it'll take to find a replacement anchor. The mall's other two anchors are Macy's and Nordstrom.

"We've known about Mervyns's difficulties in the last year, but its decision to close stores this quickly still caught us by surprise," said Rob Kallas, manager of University Mall.

"We want another department store anchor for the space. We're hopeful that some buyer will step in and pick up some of Mervyns's 149 stores," he said. "It's hard, but what else can you do? You can't just put anyone in there."

Charlie Smith, co-owner of Sakora Jewelers, one of several stores located closest to Mervyns's entrance inside the mall, said he hopes to see a Dillard's or Saks Fifth Avenue or Neiman Marcus coming in.

"It'll serve the mall better if they can get a high-end store. Take Nordstrom, for example -- they helped bring in shoppers that can buy high-end items," Smith said.

Subhead: Some mall stores worry

For several stores located near Mervyns's entrance, an area that's being expanded to accommodate a new children's interactive play area, Mervyns's closure is just another problem they face now. But mall management said it is working with several affected businesses to ease their difficulties.

Some 20 stores located closest to Mervyns sustained massive smoke damage when a fire broke out in early September while the children's play area was under construction. Police said welders had been working on the kids' treehouse and were trying to connect metal beams from the tree to the building when a spark set the inside of the tree on fire.

Police said the workers tried to put out the flames on the polyurethane-type material, but failed. The fire sprinklers went off, dousing the fire but did little to mitigate the smoke damage.

Police estimated damages at around $1.2 million, but mall officials dispute that figure. Kallas pegged damages at about $400,000, with DEB shop, Maurices and Payless ShoeSource sustaining the bulk of damages.

"Sakora's inconveniences were caused more by the construction than the fire. We had to tear their ceiling out and put in steel support beams above the store," Kallas said. "We are negotiating rent concessions with them."

Ironically, crews were rebuilding the playground, which was relocated to the area near Mervyns's entrance inside the mall, after a broken pipe flooded the mall in September 2007 and caused damage to the same area.

More than 50 stores were affected by the flooding when the water main -- near the children's play area then located closest to Zumiez and Mariposa in the east side of the mall -- broke and flooded the area with hundreds of thousands of gallons of water and mud. Maurices, Urban Wear and Fotogenix, three other nearby stores, had to be relocated to other parts of the mall while the damaged area was being rebuilt.

Andra Hancock, acting store manager for Maurices, a women's apparel chain, was frustrated by soot damage caused by the recent fire.

"It's very discouraging that we had to close the store again for several weeks while we replace the damaged inventory. We had a layer of soot over all our clothing, which cost about $300,000 to replace," she said.

But the damage this time wasn't as bad as that caused by the flood, she said.

"Our store was right behind where the treehouse used to be. We had five inches of water and mud. Our floors buckled and the walls fell apart and we had to be relocated while our current new store was being built," Hancock said.

While Hancock doesn't believe Mervyns's closure would affect traffic to Maurices, she would like to see a Dillard's or a "nicer" store replace that space.

Kallas also hopes that the new interactive children's play area, which is expected to be completed in about two weeks at the cost of $1.3 million, will be a "big enough draw" to mitigate any possible traffic loss after Mervyns closes.

"We're adding other features to the play area, a dinosaur play area with monkey bars, a large 16,000-pound granite ball sphere that floats on water," he said. "The play area usually attracts 60 to 70 people at any one time."

Subhead: Holiday sales outlook

Kohl's, which opened in early October at a 90,000 square foot space at the former Fred Meyer building opposite the mall, would have seriously considered the Mervyns space several months ago, said Jon Anderson, partner and principal broker with Commerce CRG.

"Had Kohl's known about Mervyns planned closure, it would have seriously considered that space," he said. "I'm quite confident the mall is significant enough to draw a retailer that would replace Mervyns. The biggest impact of the closure will be on retailers inside the mall between Nordstrom and Mervyns. What keeps those shops in business is the traffic between those two anchors."

Kallas declined to provide details on Mervyns's contributions to the mall's total sales, saying he expects the store to do even better this holiday season than the previous year because of the liquidation sales.

Like most retailers who are concerned about how consumers will tighten their pursestrings this holiday, he expects the mall's retail sales to be flat this year from a year ago.

"Normally, we would have increases in annual sales. But this year, some of our stores aren't seeing large increases in sales, while others experienced small decreases in sales due to growing unemployment, increased food and gas prices, and dreary news about the economy that has people cautious with their spending," he said.

Subhead: Mall expansion

But renovations and upgrades to the mall in recent years have helped improve its functionality, and should help keep the mall viable, Anderson said.

"It's a regional, enclosed mall with the flavor of a lifestyle center, which means you can drive up to the store's doorstep without running through the mall. For instance, the mall has given exterior entrances to businesses on the south side, like AT&T, Mr. Mac, and Ideal Image," he said.

"They've also repositioned the exterior buildings and made the facade more attractive, with Carrabba's Italian Grill and Starbucks at the entrance of the mall as mini anchors to draw traffic in," Anderson said.

Potentially boosting traffic to the mall is a new Cinemark theater with 14 digital screens opening Nov. 7.

The 46,000-square-foot theater, to be located at 1000 S. 750 East in Orem near Mervyns, is part of a planned multimillion-dollar expansion of University Mall. Called the University Mall Village, the 20-acre outdoor retail center is expected to be ready for occupancy early next year and will include more than 71,000 square feet of new retail and restaurant space.

The new project will add 118,000 square feet of additional retail space to the 1.5 million-square-foot mall. University Mall is owned by Salt Lake City-based Woodbury Corp., which also owns the Meadows in American Fork and several other retail and office properties in Utah County and statewide.