Gottschalks CEO Confirms Liquidation

March 31, 2009 2:21:07 PM PDT
Company officials announced late Monday night, the 105-year-old Fresno-based company has been sold to liquidators.Gottschalks operates 61 stores in six western states. Going out of business sales at all of those stores could start as early as this Thursday or Friday. The company's CEO said liquidation is now the only path for the company. Now a bankruptcy judge needs to approve the proposed liquidation on Wednesday.

5,000 people companywide will soon be losing their jobs. Gottschalks will begin notifying employees Tuesday about what will happen. Some may be kept on for the closing sales.

Gottschalks CEO Jim Famalette confirmed a group of liquidators had the winning bid for the bankrupt retailer at an auction Monday night in Delaware. Three companies submitted bids for Gottschalks, but only a Chinese company called "Shandong" was interested in keeping Gottschalks open.

In a statement, Jim Famalette said quote:
"We are extremely disappointed that we were not able to bring the Shandong bid to conclusion, but the timing of the process, our lenders timelines and Chinese government regulatory issues made it impossible for them to be able to finalize their bid in time.

All of us are truly heartbroken about this. We have worked tirelessly to try and find a resolution."

The winning liquidator group has agreed to guarantee 98-percent of the cost of the company's inventory. The funds can eventually be used to repay the chain's creditors.

The liquidation sales should be over and stores closed by July 15th.

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