Gottschalks Inc. announced that same store sales for the month of
October 2007 decreased 3% from the prior year. Total sales for the
month decreased 5.7% to $41.7 million from $44.2 million in October
2006.

For the third fiscal quarter of 2007, same store sales decreased 5.1%
and total sales decreased 7.7% to $137.4 million, compared to $148.8
million for the third fiscal quarter of 2006. On a year-to-date basis,
same store sales decreased 3.4% from the comparable period of fiscal
2006. Total sales on a year-to-date basis decreased 4.9% to $424.1
million compared to $445.7 million in the same period of the prior
year. The company operated four fewer stores for the month, quarter and
year-to-date periods compared to the same periods in fiscal 2006.

Jim Famalette, chairman and chief executive officer of Gottschalks
said, “The overall retail environment remains challenging and, with the
exception of our lifestyle center River Park store in Fresno, we have
continued to see soft sales in our California stores. While our October
sales trends were somewhat improved from earlier in the third quarter
due to the shift of a major cosmetics event, we experienced continued
weak sales in our home store merchandise categories, specifically in
furniture, mattresses and textiles, which impacted our results. With
that said, the performance of our Northwest stores remains a bright
spot as these stores continue to generate positive comparable store
sales increases. We ended the month with comparable store inventory
3.5% below last year.

“As a result of our October sales and the more promotional selling
environment, we expect our financial results in the third quarter to be
below those of the third quarter of last year,” concluded Mr. Famalette.

The company opened a new store in Elk Grove, California
yesterday. The 58,000 square feet store is one of Gottschalks' new
smaller specialty department store prototypes with increased focus on
soft-line merchandise categories.

 Sales results are summarized as follows:
                                                                    Same Store
                           November 3,    October 28,     Total %     Sales %
                              2007           2006         Change      Change
                                  (in 000's)

Sales, 4 Weeks Ended        $41,678        $44,213        (5.7%)      (3.0%)

Sales, 13 Weeks Ended      $137,352       $148,831        (7.7%)      (5.1%)

Sales, 39 Weeks Ended      $424,122       $445,739        (4.9%)      (3.4%)