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19 Jan 2007

Executive To Leave Position 2 Years After Hedge Fund Buyout

Cerberus Capital Management LP, the New York-based $16 billion hedge fund, announced that executive chairwoman Vanessa Castagna will leave her position Feb. 1, Rick Leto, president and chief merchandising officer for Mervyns, will take over day-to-day management of the 172-store chain. The hedge fund bought Mervyns from the Target Corp. in 2004.

"Vanessa's leadership was instrumental to Mervyns' successful transition as an independent company," Leto said in a statement. "We thank her for her commitment to the company and many contributions and wish her well in her future endeavors." The Mervyns announcement did not offer details about Castagna's plans. She came to Mervyns after leading a similar turnaround at a much larger retailer, JCPenney.

Castagna is credited with reviving Mervyns at a time when many retail analysts predicted its demise. Target, the highly successful discount retailer, was blamed for neglecting Mervyns and Marshall Field's, the upscale Chicago-based department store that was bought by the Federated Department Stores Inc and converted into Macy's.

Cerberus is a privately owned hedge fund, run by 45-year-old financier Steven Feinberg. Former Vice President Dan Quayle has been a prominent Cerberus spokesperson and runs one of its international units.

Founded in 1992, Cerberus invests primarily in companies which are near bankruptcy and hopes to make the businesses it acquires profitable. The company has bought out many businesses over the past several years and now includes sizable investments in sportswear, paper products, military services, real estate, energy, retail, glass making, transportation, and building products.

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