Everbright finalizes deal to acquire Gottschalks
November 21, 2008-- Home Textiles Today,
Fresno, Calif. -- West Coast regional department store chain Gottschalks has finalized its agreement turning over substantial control to British Virgin Islands and China-based sourcing company Everbright Development Overseas Ltd. for an investment of up to $30 million.
The deal, which was reported in a filing with the Securities and Exchange Commission, also includes the transfer to Gottschalks of “all of the issued and outstanding capital stock, trademarks, patents and licenses of Everbright Asia Limited,” and stipulates that Gottschalks will set up a new wholesale business.
The investment by Everbright is divided into a $15 million acquisition of newly issued shares of Gottschalks common stock, and a capital call of up to $15 million “in the form of a capital contribution or loan” which Everbright can use to bolster the retailer’s credit facility, to buy additional shares, and warrants for even more shares.
In the original, September letter of intent, Everbright had planned to buy $10 million worth of new stock; that amount has been upped to $15 million in the final agreement. Pegged at $1.80 per share, this is equivalent to a 75% ownership position. (Gottschalks shares were delisted by the New York Stock Exchange last month.)
As previously reported, features of the Gottschalks-Everbright partnership include:
The direct sourcing by Gottschalks of products through Everbright’s network;
Expansion into new product categories by Gottschalks through consignment sales, beginning by late spring 2009;
A business-to-business wholesale entity to include an online platform, to channel internationally sourced goods into the United States;
A business-to-consumer selling platform based on a membership club system, dependent upon e-commerce and personal shoppers.
Gottschalks operates 62 stores and reported a net loss of $12.4 million on sales of $628.6 million in fiscal 2007.
Related Content By Author
Industry Related Content
H&TTtv Talks Outdoor Rugs