Gottschalks: deal scrubbed but talks go on
| Friday, Dec 19 2008 02:07 PM
Last Updated Friday, Mar 27 2009 12:58 PM
Images
Melissa Burton, visual manager at Gottschalks in East Hills Mall, puts some finishing touches on a display at the newly renovated store in this photo from May.
Officials from Gottschalks Inc., the troubled Fresno-based department store chain, said late Friday afternoon discussions with an investor were continuing despite the fact a $30 million deal had been scrapped Thursday.
Bakersfield has two of Gottschalks’ 59 stores: one in Valley Plaza and the other in East Hills Mall. The regional chain operates on the West Coast from California to Alaska.
Last month, Everbright Development Overseas Ltd., a Chinese company based in the British Virgin Islands, was looking at a possible business partnership to help Gottschalks launch a wholesale business and other operations.
Paperwork filed Thursday with the Securities and Exchange Commission shows Everbright backed out of the deal.
Gottschalks, in a statement released late Friday, said the agreement had a Dec. 15 deadline that ended before Everbright could finish scrutinizing details.
But Gottschalks “remains in active discussions with Everbright as well as another party to structure a new potential transaction,” the release said. Company officials declined to elaborate when reached by phone.
In October, Gottschalks was delisted from the New York Stock Exchange when its market value fell below $25 million.
It now trades over-the-counter as GOTT.PK. Stocks fell 64 percent Friday, closing at 16 cents a share.
Like other retailers, the midlevel apparel chain has struggled in the recession.
Gottschalks’ most recent earnings report showed a loss of $19.6 million, or $1.48 a share, for the first nine months of its fiscal year, which ended Nov. 1. Sales at stores open at least a year fell 9.7 percent during that time.
In November, meanwhile, sales at existing stores fell 13 percent compared to the previous year.
