Gottschalks nearly broke
Desperate for cash, retailer in negotiations with Chinese firm
Count Gottschalks among the retail chains being hit hard by the economic downturn. The Sacramento Bee reported that the 104-year-old Fresno-based company, which owns 59 department stores in the Western United States, including one in the Chico Mall, was in negotiations with a Chinese company in a desperate search for operating cash.
The company had a tumultuous year. It closed two stores, laid off corporate employees and put expansion plans on hold. With its stock at an all-time low, the company said it had insufficient cash, sales and credit to meet its needs through January.
In mid-November, Gottschalks appeared to have made a deal with a Chinese investment company, Everbright Development Overseas Ltd., to provide $30 million to the company in exchange for a majority stake. But the pact fell apart earlier this month when Gottschalks said Everbright had terminated the agreement. Shortly afterwards, negotiations appeared back on, this time involving an unidentified third party as well.
Mike Cirigliano, manager of the Chico Gottschalks, said he’d heard only that the negotiations were continuing. The Chico store, he said, had realized good holiday-season numbers. “Chico has always been good for us,” he said.