Gottschalks

Gottschalks, Inc.

File:Gottschalks Department Store Final Logo.png
Company type	Public
Industry	Retail
Founded	1904
Defunct	July 12, 2009
Fate	Bankruptcy followed by liquidation sale
Headquarters	Fresno, California
Products	Apparel, footwear, cosmetics, jewelry, rugs, furniture, bedding, bath items, appliances, and home goods

Gottschalks (previously traded on the NYSE under the ticker GOT) was a mid-market American department store chain operating 58 stores and three specialty apparel outlets across six western states (California, Washington, Alaska, Idaho, Oregon, and Nevada). Several stores operated under the Harris-Gottschalks brand. Before its closure, it was recognized as the largest independently owned and publicly traded department store chain in the United States. On January 14, 2009, Gottschalks filed for protection under Chapter 11 bankruptcy. This filing transitioned into a full liquidation by March 31, 2009. Following the liquidation, at least five key locations were converted into Macy's outlets, while others were taken over by Forever 21.

Origins

File:Gottschalkslogo.PNG

The second Gottschalks logo in use up to 2001.

File:Gottschalk's Building Fresno 1914.jpg

Gottschalk's expanded Fresno store shortly after its 1914 opening

The company was established in 1904 by Emil Gottschalk, a German Jewish immigrant, who opened a dry goods store in downtown Fresno, California. A decade later, the business expanded sufficiently to relocate to a much larger facility downtown with ten times the floor space. Prior to his death in 1939, Emil transferred management to his brother-in-law Henry Korn and nephew Abe Blum. The first branch store debuted in Merced in 1961, followed by additional openings in Visalia and Fresno. To attract teenage baby boomers during the late 1960s, Gottschalks introduced Bobbie West, a junior apparel retail chain. In 1970, Village East stores were launched to cater to plus-sized women's fashion.

Irving (Bill) Levy was the fourth president among seven leaders throughout Gottschalks’ 105-year operation. After his passing in 1981, his son Joseph Levy assumed the roles of CEO and chairman until James Famalette succeeded him as CEO in 1999 and later as chairman in 2007.

Achieving Success

Gottschalks found its niche by establishing stores exclusively in smaller markets where full-scale national department stores were absent. This approach enabled the company to maintain low overhead costs by constructing smaller, single-level retail spaces ranging from 80,000 to 110,000 square feet, benefiting from reduced real estate expenses. Frequently, this strategy positioned Gottschalks as the dominant retailer in these communities, facing minimal competition from major national chains.

Following Emil Gottschalk's passing, leadership of Gottschalks, Inc. was assumed by:

1. Henry Korn (brother-in-law)
2. Abe Blum (only nephew)
3. Irving Levy (wife's nephew by marriage)
4. Joseph Levy (Irving Levy’s son)
5. James Famalette (unrelated)

After Irving Levy died in 1981, the roles of president and chief operating officer were held by:

1. Gerald Blum (grand-nephew and son of Abe Blum)
2. Stephen Furst (unrelated)
3. James Famalette (unrelated)

Abe Blum, who passed away in 1963, held an electrical engineering degree from Rutgers University. He was instrumental in introducing one of Fresno’s earliest air conditioning systems and was among the pioneers in the region to accept bank-issued credit cards. According to a 1977 Chain Store Age Executive report, by 1976 Gottschalks became the first American department store to fully automate sales transactions. The company implemented electronic point-of-sale (POS) devices that scanned barcodes and processed store credit cards. This innovation improved operational efficiency, minimized errors, and ensured accurate inventory and billing management.

Growth and Expansion

Between 1985 and 1988, the count of Gottschalks locations doubled from nine to eighteen, with annual revenues surging from $112 million to $196 million. This expansion was partly fueled by acquiring two smaller family-owned department store chains during 1987 and 1988 for a combined $11 million.

Brock's (Malcolm Brock and Co.) stores were incorporated into Gottschalks' portfolio, bringing 500 employees across Bakersfield locations including the Downtown flagship store and Valley Plaza Mall. The purchase of Samuel Leask & Sons added three stores along with 150 staff members in the following areas:

• Santa Cruz — approximately 80,000 square feet
• Scotts Valley — around 11,000 square feet
• Aptos — about 9,000 square feet
• A planned new store within Capitola Mall in Capitola

Midway through the decade, Gottschalks also adjusted its specialty retail segment by transforming Bobbie West juniors stores into Petites West boutiques. This shift aimed to better serve smaller-sized Asian and Latin female customers.

In 1986, Gottschalks’ shares began trading on the New York Stock Exchange under the ticker symbol GOT. Two years later, the company shuttered its flagship Fresno location due to disappointing sales results.

In 1995, Gottschalks established an online presence. The following year marked the opening of a 125,000-square-foot store at Park Lane Centre in Reno, Nevada—a mall that had lost its anchor tenants Sears and Weinstock's to a rival shopping center. Further growth occurred in Southern California through the acquisition of Harris Department Stores in 1998; these locations operated under the Harris-Gottschalks brand. In 2000, the Seattle-based Lamonts department store chain was also acquired.

Decline after 2000

The majority of Lamonts stores acquired by Gottschalks were eventually shut down due to inadequate sales performance. A notable exception was the Alaska region, where consumer demand remained robust, resulting in only one closure at the Wasilla location before the company ceased operations. Among the shutdowns were the outlets at Northgate Mall in Seattle, Washington, which closed in September 2006, and the standalone store in Tacoma Highlands that ceased operations on September 22, 2007. The Northgate Mall closure represented the final Gottschalks store in Seattle. In Washington state, Gottschalks managed to maintain a presence primarily in rural and suburban markets where competition from other department stores was less intense.

Bankruptcy and liquidation

Gottschalks was removed from the New York Stock Exchange on October 24, 2008. NYSE representatives indicated that the stock’s value had fallen below acceptable levels, with its average global market capitalization remaining under $25 million for a continuous period of 30 trading days. Company executives reported ongoing negotiations for a loan agreement with Everbright Development Overseas Limited, a Chinese firm, and expressed intentions to challenge the delisting decision. However, on December 18, 2008, it was announced that Everbright had withdrawn from the proposed agreement.

On January 14, 2009, Gottschalks filed for protection under Chapter 11 bankruptcy. By March of that year, the company revealed it had secured a group of potential buyers prepared to liquidate the chain should no alternative purchaser emerge by March 30. Subsequently, on March 31, Gottschalks declared it would proceed with liquidating its remaining outlets. The final stores shuttered their doors on July 12, 2009. Several key locations were later occupied by retailers such as Macy's and Forever 21.

Former CEO Joe Levy had intentions to revive some stores by early 2011; however, these efforts ultimately did not materialize.

Gallery

• Final clearance event at Gottschalks in Capitola, California.
  Final clearance event at Gottschalks in Capitola, California.
• A sign spinner employed to promote the closing sale in Capitola, California.
  A sign spinner employed to promote the closing sale in Capitola, California.

See also

• Max Gottschalk – American artist (1909–2005)

External links

• Overview of Gottschalks, Inc. corporate restructuring — provided by Kurtzman Carson Consultants LLC.