Gottschalks Inc. saw February comparable store sales decrease 3.6% compared to the prior year. Total sales for the month decreased 3.8% to $42.6 million from $44.3 million in February 2006. The company operated three fewer stores than in the comparable period last year.

Jim Famalette, president and chief executive officer of Gottschalks, said, “We experienced softness in our home store merchandise in February and continue to focus on improving our merchandise and marketing strategies for this division. Our sales for the month also reflect the shift of a major cosmetics event that was held in February last year but will be held in March this year. Our best performing merchandise areas during February were shoes, dresses, and better sportswear. We ended the month with comparable inventory levels up 1.7%.”

Sales results are summarized as follows:

                                                              Same Store
                           March 3,   February 25,   Total %    Sales %
                             2007         2006        Change     Change
                                 (in 000's)
    Sales, 4 Weeks Ended    $42,620      $44,290      (3.8%)     (3.6)%