RETAILING

Mervyn’s Rebound Predicted: Stephen Watson, president of Dayton Hudson, the Minneapolis-based company that operates the chain, said he expects Mervyn’s sales to improve in the fiscal third quarter of this year, which begins Aug. 1. Watson said the California economy may soon begin to rebound, a development that would bolster Mervyn’s sales. Mervyn’s operates 179 stores in 15 states, including 125 stores in California.