Finance news. My opinion.

Mervyns LLC is struggling to avoid bankruptcy, according to media reports Monday.

Company officials reportedly are trying to persuade vendors to ship merchandise for their crucial back-to-school season.

This occurred after the company lost a source of financing from a lender, CIT Group Inc., which has dramatically reduced business loans, according to a report in the Wall Street Journal. If the effort fails, bankruptcy is a possibility for the midrange department store chain based in Hayward, which operates 177 stores in California and six other western states. The company employs about 23,000 people.

Roy Berces, a Mervyns spokesman, said Monday he could not comment on reports of the retailer's financial difficulties. He did say, however, that Mervyns still plans to open a new 80,000-square-foot store Friday in Newark, just north of NewPark Mall. The company plans to close its NewPark store, as well as another store at Alameda Towne Centre later this month.

In May, Mervyns announced plans to close five to 10 underperforming stores, but open another five in its core western market payday loans. One of those is slated to open at Inland Center in San Bernardino in October.

Some retail industry analysts said four years ago the company would not survive a sale by its longtime parent company, Target Corp. However, Target sold an intact Mervyns to a consortium of investors for $1.2 billion, which then proceeded to close about 70 underperforming stores and exit several markets in the Midwest and South. The investment group, currently led by Sun Capital Partners Inc. of Boca Raton, Fla., has also begun opening new stores during the past two years.