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Gottschalks To Grow Home Assortment

Company To Focus On Textiles, Tabletop And Housewares In Effort To Spur Growth

Fresno, Calif. — After generating lower-than-expected sales in the home division, Gottschalks will place a greater emphasis on textiles, tabletop and housewares — weaker performing home categories for the retailer, executives said during a third-quarter earnings call.

In addition, the company's growing furniture and mattress segments will be added to five more stores in spring 2006. Currently only 26 Gottschalks locations carry these products.

According to Jim Famalette, Gottschalks president and CEO, comp-store sales for the quarter were not as strong as anticipated due to soft sales in the home division. The company also experienced increased distribution costs related to higher fuel prices as well as expenses associated with a new store opening and the closing of another store.

However, Famalette stated that its River Park lifestyle center in Fresno opening contributed to a 2.3 percent increase in total sales for the quarter due to its very strong performance. The new store format features a greater breadth of higher-end products.

“Our key merchandise areas such as better sportswear, juniors, accessories and shoes continued to generate solid results, and we plan to maintain our emphasis on these areas going forward,” he said, adding that Gottschalks was able to increase its gross margin as a result of strong inventory management and controlling promotional activity.

Gottschalks also finalized an agreement for the closure of its Puyallup store near Tacoma, Wash., by end of fiscal 2005. The company does not anticipate any material costs associated with the closure of this store.

As for expansion, the company is looking at several potential sites in California as well as another western state that will become available as a result of the Federated-May merger.

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