polo clearance sale Gottschalks files for bankruptcy protection
Fresno based retailer Gottschalks announced Wednesday morning that it has filed for protection under the federal bankruptcy code, seeking a reorganization under Chapter 11. Its 58 stores includes one in Chico Mall. Chico store manager Mike Cirigliano said there’s no change in his operation. “We’re open. Everything’s as usual.” Cirigliano, who has been at the store 21 years, said he has been told by the company not to comment on the bankruptcy filing. A press release from the company’s headquarters said its goal is to conduct business as usual, without interruption, but is probably pursuing a buyer for the retailer. Gottschalks said it has arranged $125 million to supply working capital to pay employees’ wages and benefits, vendor payments and other expenses. In the statement, Gottchalks’ Chairman Jim Famalette said, “This was a very difficult, but necessary decision; however we want to assure out employees and loyal customers that Gottschalks will be conducting business as usual. “Gottschalks is very proud of its 104 year heritage and our culture as the ‘hometown store’ serving the communities where our stores operate.” The department store chain has assets of $288.4 million and debts of $197.1 million, according to its bankruptcy petition filed today in the United States Bankruptcy Court for the District of Delaware. “Persistent challenges in the economy and recent, unexpected reductions to our borrowing capacity as a result of tightening credit markets have left us with no other recourse,” Famalette said in a statement. Gottschalks operates 59 department stores and three Village East specialty clothing stores in California, Washington, Alaska, Oregon, Nevada and Idaho. Its largest market is California, where it has 38 stores. Its largest creditors include Liz Claiborne Inc., The Estee Lauder Cos. and Jones Apparel Group Inc. A wave of bankruptcy filings and store closings is expected following the disastrous holiday shopping season. Struggling regional department stores, squeezed by discounters and national players such as Macy’s Inc., are expected to be among the hardest hit. Hayward based Mervyns LLC, which filed for Chapter 11 bankruptcy protection in July, is now liquidating inventory at its remaining 149 stores and winding down its business. The Chico store is already closed. National chains that have been hammered include Circuit City Stores Inc., which filed for bankruptcy protection in November, said last week it’s in talks that could result in a sale or additional financing. Toy seller KB Toys, which filed for bankruptcy in December, is liquidating its stores and will shut down. Goody’s Family Clothing announced on Jan. 6 that it was liquidating and on Tuesday it filed for bankruptcy protection.