Gottschalks
Encyclopedia
Gottschalks was a middle-tier American department store
that operated 58 department stores and three specialty apparel stores in six western states (California
, Washington, Alaska
, Idaho
, Oregon
, and Nevada
); some locations ran as Harris-Gottschalks stores. Prior to liquidation, it was the largest independently owned, publicly traded
department store chain in the United States. On January 14, 2009, Gottschalks filed for Chapter 11 bankruptcy
. This bankruptcy became a liquidation on March 31, 2009.
Gottschalks was founded by German Jewish immigrant Emil Gottschalk in 1904 as a dry goods
store in downtown Fresno, California
. 10 years later, the store grew enough to move into another building in downtown with ten times the amount of space. The company opened its first branch store in Merced in 1961 and new stores in Visalia and Fresno. Around this time Gottchalks' grandnephew Irving Levy, whose father had helped found the company, took control. In a strategy to win over teenage baby-boomers, Gottschalks launched Bobbie West, a chain of junior apparel stores, in the late 1960s. Village East shops, which offered plus-sized women's clothing, were launched in 1970.
Irving Levy served as president until his death in 1980 at age 86, guiding Gottschalks' growth into a chain of six department stores and over a dozen specialty boutiques with over $80 million in annual sales.
Gottschalks was Fresno's first retailer to install an air conditioner, and was among the first retailers in the area to accept bank credit cards. According to a 1977 Chain Store Age Executive article, in 1976 Gottschalks became America's first department store to totally automate sales transactions. The company installed electronic point of sale (POS) "wands" that read bar codes and store credit cards. This technology helped increase efficiency, reduce errors, and keep inventory and customer billing up to date.
After this initial system of automation, however, Gottschalks did not significantly update its systems. Even when Gottschalks closed its doors on July 12, 2009, Gottschalks had a very old POS system that left associates wondering why Gottschalks never invested in new and better systems to keep up with other retailers.
The company's stock started trading on the New York Stock Exchange
in 1986 under the symbol GOT. In 1995 the company went online. In 1998 The company had to close its only money-losing location, the flagship store in downtown Fresno. The company grew in Southern California
with the 1998 acquisition of Harris Department Store
s. In 2000 the Seattle based department store Lamonts
was acquired.
Most of the former Lamonts stores converted into Gottschalks were closed due to poor sales. The exception was the Alaska market, where sales were strong and only one store, Wasilla, was closed prior to the company's shutdown. Closures included the locations at the Northgate Mall
in Seattle, WA, in September 2006, and in Tacoma Highlands on September 22, 2007, a free-standing location unlike the typical mall setting. The Northgate Mall location marked the closing of the last Gottschalks in Seattle. In Washington state, the remaining Gottschalks locations had succeeded in rural
and suburban areas with less competition from other department stores.
On October 24, 2008, Gottschalks was delisted from the New York Stock Exchange
. NYSE officials stated that the value of the stock was too low to continue to be listed, and that its average global market capitalization
had remained below $25 million for 30 straight trading days. Company officials claimed to be negotiating a deal for a loan with a Chinese company, Everbright Development Overseas Limited. They also stated that they would appeal the delisting decision. On December 18, 2008 Gottschalks officials announced that Everbright had pulled out of the deal.
On January 14, 2009, Gottschalks filed for Chapter 11 bankruptcy
. In March 2009, Gottschalks announced it lined up a group of bidders that would liquidate the chain if no other bidder is found by March 30. On March 31, Gottschalks announced it would liquidate its remaining stores. On July 12, 2009 all of the Gottschalks stores were closed for good. Macy's
replaced the Visalia Mall
location in Visalia
and the River Park location in Fresno while Forever 21
took over locations such as the Hanford Mall in Hanford
, the Vintage Faire Mall
in Modesto
, the Valley Plaza Mall
in Bakersfield
, the Yuba Sutter Mall
in Yuba City
, and the Madonna Plaza in San Luis Obispo
.
Department store
A department store is a retail establishment which satisfies a wide range of the consumer's personal and residential durable goods product needs; and at the same time offering the consumer a choice of multiple merchandise lines, at variable price points, in all product categories...
that operated 58 department stores and three specialty apparel stores in six western states (California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, Washington, Alaska
Alaska
Alaska is the largest state in the United States by area. It is situated in the northwest extremity of the North American continent, with Canada to the east, the Arctic Ocean to the north, and the Pacific Ocean to the west and south, with Russia further west across the Bering Strait...
, Idaho
Idaho
Idaho is a state in the Rocky Mountain area of the United States. The state's largest city and capital is Boise. Residents are called "Idahoans". Idaho was admitted to the Union on July 3, 1890, as the 43rd state....
, Oregon
Oregon
Oregon is a state in the Pacific Northwest region of the United States. It is located on the Pacific coast, with Washington to the north, California to the south, Nevada on the southeast and Idaho to the east. The Columbia and Snake rivers delineate much of Oregon's northern and eastern...
, and Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
); some locations ran as Harris-Gottschalks stores. Prior to liquidation, it was the largest independently owned, publicly traded
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
department store chain in the United States. On January 14, 2009, Gottschalks filed for Chapter 11 bankruptcy
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
. This bankruptcy became a liquidation on March 31, 2009.
Beginnings
Dry goods
Dry goods are products such as textiles, ready-to-wear clothing, and sundries. In U.S. retailing, a dry goods store carries consumer goods that are distinct from those carried by hardware stores and grocery stores, though "dry goods" as a term for textiles has been dated back to 1742 in England or...
store in downtown Fresno, California
Fresno, California
Fresno is a city in central California, United States, the county seat of Fresno County. As of the 2010 census, the city's population was 510,365, making it the fifth largest city in California, the largest inland city in California, and the 34th largest in the nation...
. 10 years later, the store grew enough to move into another building in downtown with ten times the amount of space. The company opened its first branch store in Merced in 1961 and new stores in Visalia and Fresno. Around this time Gottchalks' grandnephew Irving Levy, whose father had helped found the company, took control. In a strategy to win over teenage baby-boomers, Gottschalks launched Bobbie West, a chain of junior apparel stores, in the late 1960s. Village East shops, which offered plus-sized women's clothing, were launched in 1970.
Irving Levy served as president until his death in 1980 at age 86, guiding Gottschalks' growth into a chain of six department stores and over a dozen specialty boutiques with over $80 million in annual sales.
Becoming successful
Gottschalks gained success by locating only in smaller cities that could not support full-size national department stores. This tactic kept Gottschalks' overhead low by allowing it to build smaller (80,000- to 110,000-square-foot), single-level stores with lower real estate costs and cheaper labor. More often than not, it also made Gottschalks "the only game in town", with virtually no competition from other department stores. Some stores ran under the Harris-Gottschalks name.Gottschalks was Fresno's first retailer to install an air conditioner, and was among the first retailers in the area to accept bank credit cards. According to a 1977 Chain Store Age Executive article, in 1976 Gottschalks became America's first department store to totally automate sales transactions. The company installed electronic point of sale (POS) "wands" that read bar codes and store credit cards. This technology helped increase efficiency, reduce errors, and keep inventory and customer billing up to date.
After this initial system of automation, however, Gottschalks did not significantly update its systems. Even when Gottschalks closed its doors on July 12, 2009, Gottschalks had a very old POS system that left associates wondering why Gottschalks never invested in new and better systems to keep up with other retailers.
Expansion
The number of Gottschalks units doubled from nine in 1985 to 18 in 1988 and annual revenues increased from $112 million to $196 million in the process. Part of this growth came via the acquisition of two small family-run department store chains in 1987 and 1988. Totaling $11 million, the purchases of the privately held Malcolm Brock and Samuel Leask & Sons chains added five stores. The chain also refined its specialty store offerings, converting its Bobbie West juniors stores into Petites West boutiques mid-decade in order to attract smaller-sized Asian and Latin women.The company's stock started trading on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
in 1986 under the symbol GOT. In 1995 the company went online. In 1998 The company had to close its only money-losing location, the flagship store in downtown Fresno. The company grew in Southern California
Southern California
Southern California is a megaregion, or megapolitan area, in the southern area of the U.S. state of California. Large urban areas include Greater Los Angeles and Greater San Diego. The urban area stretches along the coast from Ventura through the Southland and Inland Empire to San Diego...
with the 1998 acquisition of Harris Department Store
Harris Department Store
The Harris Company was a retail corporation, based in San Bernardino, California, that operated a chain of department stores named Harris', all in Southern California...
s. In 2000 the Seattle based department store Lamonts
Lamonts
Lamonts was a chain of department stores founded in Seattle, Washington. The chain was started in 1970 when Pay 'n Save renamed its suburban branches of Rhodes, a department store chain the company acquired in 1965. Lamonts remained a division of Pay 'n Save until 1985...
was acquired.
Most of the former Lamonts stores converted into Gottschalks were closed due to poor sales. The exception was the Alaska market, where sales were strong and only one store, Wasilla, was closed prior to the company's shutdown. Closures included the locations at the Northgate Mall
Northgate Mall
Northgate Mall may refer to:*Northgate Mall in Durham, North Carolina*Northgate Mall in Hixson, Tennessee*Northgate Mall in Seattle, Washington*Northgate Mall in Cincinnati, Ohio...
in Seattle, WA, in September 2006, and in Tacoma Highlands on September 22, 2007, a free-standing location unlike the typical mall setting. The Northgate Mall location marked the closing of the last Gottschalks in Seattle. In Washington state, the remaining Gottschalks locations had succeeded in rural
Rural
Rural areas or the country or countryside are areas that are not urbanized, though when large areas are described, country towns and smaller cities will be included. They have a low population density, and typically much of the land is devoted to agriculture...
and suburban areas with less competition from other department stores.
Bankruptcy and liquidation
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
. NYSE officials stated that the value of the stock was too low to continue to be listed, and that its average global market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
had remained below $25 million for 30 straight trading days. Company officials claimed to be negotiating a deal for a loan with a Chinese company, Everbright Development Overseas Limited. They also stated that they would appeal the delisting decision. On December 18, 2008 Gottschalks officials announced that Everbright had pulled out of the deal.
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
. In March 2009, Gottschalks announced it lined up a group of bidders that would liquidate the chain if no other bidder is found by March 30. On March 31, Gottschalks announced it would liquidate its remaining stores. On July 12, 2009 all of the Gottschalks stores were closed for good. Macy's
Macy's
Macy's is a U.S. chain of mid-to-high range department stores. In addition to its flagship Herald Square location in New York City, the company operates over 800 stores in the United States...
replaced the Visalia Mall
Visalia Mall
The Visalia Mall is an enclosed shopping mall located in Visalia, California.-History:The Visalia Mall was the first enclosed shopping mall in California when it opened in 1964.In September 1997, the mall finished its $30 million renovation...
location in Visalia
Visalia, California
Visalia is a Central California city situated in the heart of California’s agricultural San Joaquin Valley, approximately southeast of San Francisco and north of Los Angeles...
and the River Park location in Fresno while Forever 21
Forever 21
Forever 21 is an American chain of clothing retailers with branches in major cities in The United States, Puerto Rico, Canada, Europe, Asia, and the Middle East that offers fashion and accessories for young women and men....
took over locations such as the Hanford Mall in Hanford
Hanford, California
Hanford is an important commercial and cultural center in the south central San Joaquin Valley and is the county seat of Kings County, California. It is the principal city of the Hanford-Corcoran, California Metropolitan Statistical Area , which encompasses all of Kings County, including the cities...
, the Vintage Faire Mall
Vintage Faire Mall
Vintage Faire Mall is a shopping mall located in Modesto, California. It is owned and operated by The Macerich Company and is adjacent to State Route 99.The mall is anchored by Forever 21, JCPenney, Macy's and Sears.-Anchors:...
in Modesto
Modesto, California
Modesto is a city in, and is the county seat of, Stanislaus County, California. With a population of approximately 201,165 at the 2010 census, Modesto ranks as the 18th largest city in the state of California....
, the Valley Plaza Mall
Valley Plaza Mall
The Valley Plaza Mall is a major retail shopping mall in Bakersfield, California. It is the largest mall in the San Joaquin Valley. The mall is owned by General Growth Properties, a real estate development of over 200 regional shopping malls around the United States. Valley Plaza Mall has 5 anchor...
in Bakersfield
Bakersfield, California
Bakersfield is a city near the southern end of the San Joaquin Valley in Kern County, California. It is roughly equidistant between Fresno and Los Angeles, to the north and south respectively....
, the Yuba Sutter Mall
Yuba Sutter Mall
The Yuba Sutter Mall is a shopping mall located in Yuba City, California,opening on March 21, 1990. It was previously named The Mall at Yuba City until June 24, 2005 after a mild renovation and it serves as the regional mall for the Yuba-Sutter area. The mall moved from Yuba County to the current...
in Yuba City
Yuba City, California
Yuba City is a Northern California city, founded in 1849. It is the county seat of Sutter County, California, United States. The population was 64,925 at the 2010 census....
, and the Madonna Plaza in San Luis Obispo
San Luis Obispo, California
San Luis Obispo is a city in California, located roughly midway between San Francisco and Los Angeles on the Central Coast. Founded in 1772 by Spanish Fr. Junipero Serra, San Luis Obispo is one of California’s oldest communities...
.
External links
- Gottschalks Inc. corporate restructuring overview at Kurtzman Carson Consultants LLC