Gottschalks Sharpens Promotions as Losses Mount
December 15, 2008,
To maximize onan otherwise lackluster holiday selling season, Gottschalks this month started courtingformer Mervyns shoppers in its markets with a special promotional effort, anted up its television campaign, and brought inventories to "appropriate levels," the 59-unit regional department store said during its third quarter earnings call.
The retailer reported a quarterly loss of $10.1 million, or 76 cents per diluted share, compared to a loss of $4.1 million, or 30 cents, in the year-ago period. In 2008 year-to-date, the net loss was $19.7 million, or $1.48 per share, deepened from the loss of $13.6 million, or 99 cents, one year ago.
Quarterly sales fell 13.3% to $119.1 million; comps decreased 12.1%. Year-to-date sales fell 10.9% to $378.0 million with comps down 9.7%.
Looking ahead to the new year, Gottschalks is bracing for"an unfavorable economic backdrop." The company, he said, is feeling more secure having recently signed off on a definite agreementfor up to $30 million in investment in the retailer by Everbright Development Overseas Ltd. Famalette said thisproposed transactionremains subject to customary closing conditions, includingapproval of shareholders, receipt of third party consents, and a diligence review that expires on Dec. 15.