Gottschalks Losses Widen, Analyzing Real Estate
Staff -- Home Textiles Today, 12/17/2007
Fresno, Calif. — Western regional department store chain Gottschalks reported a net loss of $13.6 million for the three quarters year-to-date through Nov. 3, more than twice the $6.2 million loss in the year-ago period.
Gottschalks had a quarterly net loss of $4.1 million, wider than the loss of $2.7 million in the third quarter of 2006. Quarterly sales fell 7.7% to $137.4 million, as comp store sales were off 5.1%. Year-to-date comps are down 3.4%.
In the silver lining department, chairman and ceo Jim Famalette pointed to SG&A expenses below year-ago levels and a comp store inventory cut of 3.5% for the quarter.
The 63-store company also noted, in an SEC filing, that the board of directors has formed a special committee to review its real estate situation.
One year ago, the board retained UBS Investment Bank to explore strategic alternatives. No dramatic outcome was developed from that initiative. Although there was some speculation last May that a major retailer such as Wal-Mart could acquire the Northern California stores of Gottschalks (which are underperforming the company trend) as a quick way to expand in that market, Gottschalks declared in August that the strategic review had concluded with a decision to “pursue its own long-term growth strategy to maximize shareholder value” in a “Value Improvement Program” (VIP).
The VIP includes such measures as “a stepped-up new store opening schedule, a new directional effort to the company's marketing programs, significant enhancements to information technology systems and a plan to better utilize Gottschalks' owned real estate.”
Gottschalks has also announced the appointment of Robert Vernick to vp information technology, reporting to evp and coo Gregory Ambro. He will be key in the Gottschalks effort to streamline its logistics, replenishment, price optimization and management systems.
With more than 30 years of IT experience, Vernick was most recently vp, cio at Friedman's Inc. Previously he had stints at discounters Fred's and Bradlees, and with Motorola.
