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CERBERUS TAPS CASTAGNA TO LEAD MERVYN’S

Vanessa Castagna helped turn around J.C. Penney Co., and now private investment fund Cerberus Capital Management has hired her to do the same at Mervyn’s. Castagna will serve as chairman of the California-based Mervyn’s department store chain, which operates 250 stores in 13 states.

Castagna left J.C. Penney in November after the retailer’s board of directors named an outsider — Mike Ullman — to replace her boss Allen Questrom as chief executive. “She has clearly played a pivotal role in improving JCPenney’s merchandise, stores, operations, and in building a strong management team,” Questrom said in a press release at the time.

In 2004, Mervyn’s reported total sales of $3.55 billion, about one-fifth the size of JCPenney’s.

Before joining Penney in 1999, Castagna was the highest ranking woman at Bentonville, Ark.-based Wal-Mart Stores Inc., with the title of senior vice president and merchandise manager. She also worked for Target Corp. and Federated Department Stores during her 32-year career in retail.

New York City-based Cerberus, along with a pool of private investors, acquired Mervyn’s from Target Corp. in 2004 for $1.65 billion. The $14 billion fund has a history of investing in struggling retailers, including Wherehouse Entertainment and Esprit Holdings.