Valley Retail Giant Gottschalks Gets Financial Help

November 21, 2008 12:00:00 AM PST
Valley retail giant Gottschalks may soon be on the list of those receiving a financial bailout, but not from the government.Gottschalk's retail stores are as much a part of the Valley as raisins and citrus ... But over the last year Gottschalks sales have dropped nearly 20% and last month the New York Stock Exchange suspended trading of the company's stock because its price plunged dramatically.

Friday executives announced a $30-million investment plan from overseas company Everbright to dig Gottschalks out of financial limbo and make them a more competitive player in the retail world.

"Most of our competitors are much bigger and they already have buying offices overseas and we don't have that because of our size but this at least will maybe help level the playing field a little bit," said Gottschalks Chief Operating Officer Gregory Ambro.

Headquarted in the British Virgin Islands, Everbright specializes in overseas import of high end clothing brands- and electronics--a first for Gottschalks stores. Under the agreement Everbright will buy $15-million in stock and loan $15-million to the valley retail group.

"They needed an infusion of capital into that company," said local economist Henry Nishimoto.

Nishimoto said the financially wounded Gottschalks faces an uphill battle in this struggling economy and worries 30-million may not be enough.

"A band aid. Whether they come out of this stronger is going to depend on what happens over the next few months," said Nishimoto.

Shoppers we spoke to agreed.

"I don't know if it's gonna help really," said Fresno's Cheryl Michael. "It's touching everybody everywhere so I'm not really sure it's gonna make that big of a difference."

Gottschalks executives must wait until next year to learn if their strategic business plan is a "Go." A shareholders' vote will make or break the plan.

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