End of the line for Gottschalks
March 31, 2009-- Home Textiles Today,
Fresno, Calif. – With a liquidator consortium making the high bid for its assets yesterday, bankrupt regional department store operator Gottschalks Inc. said it will sell off most assets in GOB sales that could start Thursday.
A joint venture of four liquidators – Great American Group, Hudson Capital Partners, SB Capital Group, and Tiger Capital Group (all LLCs) – submitted the prevailing bid at yesterday’s auction in Wilmington, Del.
The auction is expected to be approved by the U.S. Bankruptcy Court for the District of Delaware at a hearing tomorrow, April 1. Along with merchandise, the sales will also comprise the company’s furnishings, trade fixtures and equipment, Gottschalks said. The GOB sales would be expected to conclude on or before July 15.
Gottschalks, founded in 1904 and growing by 2003 to more than 70 stores in California and five other Western states, had a store count of 55 when it filed for Chapter 11 on January 14. The company today released this statement by Jim Famalette, chairman and ceo: "Despite all our efforts at earnest negotiations, we were unable to reach an agreement with our creditors, lenders and bidders to structure a going concern bid by the court-imposed deadline. Regrettably, liquidation is now the only path for our company. We are deeply disappointed with this outcome and the impact it will have on our employees, customers, business partners and the communities we have served for 105-years."
After a string of just-profitable years, the retailer posted a net loss of $12.4 million on 2007 sales of $628.6 million. Sales fell to $563.2 million in 2008; a net loss of $19.7 million was recorded for the first nine months of the fiscal year.