The new stores will roll out in 2009 in the firm's core markets of California and the Southwest.
Mervyns said the sale of the underperforming doors would generate $25 million to $50 million in cash to fund operations and growth initiatives.
The fully integrated e-commerce Web site will launch during the fourth quarter and presents a new expansion vehicle for the retailer. Management predicts the online platform could quickly grow into a $50 million business.
The reshuffling of capital marks the influence of chief executive officer John Goodman, who joined Mervyns in April from Levi Strauss & Co.
Goodman also is focusing on providing products and services for key niche markets, specifically Hispanic customers.
Based in Hayward, Calif., Mervyns currently has 177 stores across seven states.