Gottschalks files for bankruptcy protection

Fresno-based Gottschalks announced today the department store chain has filed for bankruptcy protection from creditors, blaming a slumping retail economy but vowing to remain open as it seeks options - including the possible sale of the company - to reorganize its finances.

In a statement issued this morning, the company announced it voluntarily filed a Chapter 11 bankruptcy petition. In a statement, the company said it will seek permission from the U.S. Bankruptcy Court "to conduct business as usual without interruption."

Gottschalks was founded in 1904. In addition to its 58 department stores and three specialty clothing stores throughout the western United States, the company also has its corporate headquarters in north Fresno and operates a large distribution center in Madera.

In its most recent annual report, issued in April 2008, Gottschalks had about 4,800 employees on its payroll, including about 2,300 part-timer workers.

Today’s filing was expected. In its third-quarter earnings report filed with the U.S. Securities and Exchange Commission in early December, Gottschalks officials warned that they didn't expect the company's cash, operating income and available credit to last through the end of the fiscal year on Jan. 31.

Gottschalks' statement said the company will "pursue one or more options to create value for stakeholders, including a sale of its business or other transaction with a third party investor ... to attain the highest and best offer from interested parties."

"This was a very difficult, but necessary decision," Gottschalks Chairman James Famalette said in the statement. "We want to assure our employees and loyal customers that Gottschalks will be conducting business as usual."

To read the complete article, go to The Fresno Bee.