Gottschalks closing stores; selling credit card business

Staff -- Home Textiles Today, 2/10/2003 12:00:00 AM

FRESNO, CA —

Gottschalks said it will close six stores and sell off its credit card business as part of a five-point financial restructuring plan intended to improve liquidity and cut debt.

It also said it expects to take a one-time, non-cash fourth quarter charge of $3 million tied to the closings. The overall plan, announced last week, is expected to reduce the retailer's debt load by roughly $37 million. Household International is buying the credit card business, which has more than one million accounts with annual sales in excess of $300 million, according to the company.

Additionally, six underperforming stores, located primarily in Seattle and the Pacific Northwest, will be closed in the next 90 days, the merchant said.

Among other provisions of the plan are the planned openings of two new stores a year beginning in spring, 2004. Several locations in California are currently under consideration, the company said. It also plans to expand its private label programs.