Gottschalks

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Gottschalks, Inc.
Former type Public
Industry Retail
Fate Bankruptcy
Founded 1904
Defunct 2009
Headquarters Fresno, California
Products Clothing, footwear, bedding, furniture, jewelry, beauty products, and housewares

Gottschalks (former NYSE ticker symbol GOT) was a middle-tier American department store that operated 58 department stores and three specialty apparel stores in six western states (California, Washington, Alaska, Idaho, Oregon, and Nevada); some locations ran as Harris-Gottschalks stores. Prior to liquidation, it was the largest independently owned, publicly traded department store chain in the United States. On January 14, 2009, Gottschalks filed for Chapter 11 bankruptcy.[1] This bankruptcy became a liquidation on March 31, 2009.[2]

Beginnings[edit]

The second Gottschalks logo.

Gottschalks was founded by German Jewish immigrant Emil Gottschalk in 1904 as a dry goods store in downtown Fresno, California.[3] Ten years later, the store grew enough to move into another building downtown with ten times the amount of space.[3] The company opened its first branch store in Merced in 1961 and new stores in Visalia and Fresno. Around this time Gottchalks' grandnephew Irving Levy, whose father had helped found the company, took control. In a strategy to win over teenage baby-boomers, Gottschalks launched Bobbie West, a chain of junior apparel stores, in the late 1960s. Village East shops, which offered plus-sized women's clothing, were launched in 1970.

Irving Levy served as president until his death in 1980 at age 86, guiding Gottschalks' growth into a chain of six department stores and over a dozen specialty boutiques with over $80 million in annual sales.

Becoming successful[edit]

Gottschalks gained success by locating only in smaller cities that could not support full-size national department stores. This tactic kept Gottschalks' overhead low by allowing it to build smaller (80,000- to 110,000-square-foot), single-level stores with lower real estate costs. More often than not, it also made Gottschalks "the only game in town", with virtually no competition from other national department stores.

The presidents of Gottschalks, Inc. following the death of Emil Gottschalks:

  1. Henry Korn (brother in law)
  2. Abe Blum, (sole nephew)
  3. Irving Levy (wife's nephew by marriage)
  4. Gerald Blum, (grand nephew and son of Abe Blum)
  5. Stephen Furst (no relation)
  6. James Famalette (no relation)

Abe Blum (died 1963), had a degree in electrical Engineering from Rutgers University, and was responsible for installing one of Fresno's first air conditioning system and was among the first retailers in the area to accept bank credit cards. According to a 1977 Chain Store Age Executive article, in 1976 Gottschalks became America's first department store to totally automate sales transactions. The company installed electronic point of sale (POS) "wands" that read bar codes and store credit cards. This technology helped increase efficiency, reduce errors, and keep inventory and customer billing up to date.

Expansion[edit]

The number of Gottschalks units doubled from nine in 1985 to 18 in 1988 and annual revenues increased from $112 million to $196 million in the process. Part of this growth came via the acquisition of two small family-run department store chains in 1987 and 1988. Totaling $11 million, the purchases of the privately held Malcolm Brock and Samuel Leask & Sons chains added five stores. The chain also refined its specialty store offerings, converting its Bobbie West juniors stores into Petites West boutiques mid-decade in order to attract smaller-sized Asian and Latin women.

The company's stock started trading on the New York Stock Exchange in 1986 under the symbol GOT.[4] In 1988, the company closed its flagship store in Fresno, California due to unsatisfactory sales.[5] In 1995, the company went online. The company grew in Southern California with the 1998 acquisition of Harris Department Stores. In 2000, the Seattle based department store Lamonts was acquired.[3]

Most of the Lamonts locations that were acquired by Gottschalks eventually closed due to poor sales. The exception was the Alaska market, where sales were strong and only one store, Wasilla, was closed prior to the company's shutdown. Closures included the locations at the Northgate Mall in Seattle, WA, in September 2006, and in Tacoma Highlands on September 22, 2007, a free-standing location unlike the typical mall setting. The Northgate Mall location marked the closing of the last Gottschalks in Seattle. In Washington state, the remaining Gottschalks locations had succeeded in rural and suburban areas with less competition from other department stores.

Bankruptcy and liquidation[edit]

On October 24, 2008, Gottschalks was delisted from the New York Stock Exchange. NYSE officials stated that the value of the stock was too low to continue to be listed, and that its average global market capitalization had remained below $25 million for 30 straight trading days. Company officials claimed to be negotiating a deal for a loan with a Chinese company, Everbright Development Overseas Limited. They also stated that they would appeal the delisting decision. On December 18, 2008 Gottschalks officials announced that Everbright had pulled out of the deal.[6]

On January 14, 2009, Gottschalks filed for Chapter 11 bankruptcy.[1] In March 2009, Gottschalks announced it lined up a group of bidders that would liquidate the chain if no other bidder is found by March 30.[7] On March 31, Gottschalks announced it would liquidate its remaining stores.[2] The chain's final stores closed July 12, 2009.

Gallery[edit]

Store closing sale at Gottschalks in Capitola, California. 
A Sign spinner hired to for the closing sale in Capitola, California

References[edit]

  1. ^ a b Dorfman, Brad (14 January 2009). "Retailers Gottschalks and Goody's file for bankruptcy". Reuters (Thomson Reuters). Retrieved 14 January 2009. 
  2. ^ a b Kelly Johnson (March 13, 2009). "Gottschalks makes deal with liquidation bidder". The Sacramento Business Journal. Retrieved 1 August 2010. 
  3. ^ a b c "Gottschalks history". The Fresno Bee. January 14, 2009. Retrieved 2009-01-15. [dead link]
  4. ^ "About Gottschalks". Gottschalks. Retrieved 2009-01-15. 
  5. ^ "Gottschalks, Inc.". FundingUniverse. Retrieved 2009-01-15. 
  6. ^ Sheehan, Tim (December 19, 2008). "Chinese firm drops Gottschalks". The Modesto Bee. Retrieved 2009-01-15. 
  7. ^ Gottschalks may shut down[dead link][dead link]

External links[edit]