Gottschalks Inc. announced that same store sales for the month of January 2006 increased 0.3%. Total sales for the month increased 2.3% to $35.9 million from $35.1 million in January 2005.

Fourth quarter fiscal 2005 same store sales increased 2.2% and total sales increased 3.6% to $229.9 million from $221.8 million for the same period of fiscal 2004. For the 52-week fiscal year, same store sales increased 1.2% from the comparable period of fiscal 2004. Total sales for the fiscal year increased 2.3% to $676.9 million compared to $662.0 million in fiscal 2004.

Jim Famalette, president and chief executive officer of Gottschalks, said, “Our January sales were softer than expected, due in part to a slow post New Year's week. Our best performing merchandise categories during the month of January were shoes, coats, juniors and men's apparel as well as furniture. Overall for both the fourth quarter and the fiscal year, we have experienced strong sales trends in our more fashion forward merchandise categories. We have also maintained our focus throughout the year on improving inventory turnover and ended the fiscal year with 1.2% less inventory than the prior year in comparable stores.”

Sales results are summarized as follows:

                                                                    Same Store
                            January 28,   January 29,    Total %      Sales %
                               2006          2005       Increase     Increase
                                   (in 000's)

    Sales, 4 Weeks Ended      $35,884       $35,090       2.3%         0.3%

    Sales, 13 Weeks Ended    $229,866      $221,796       3.6%         2.2%

    Sales, 52 Weeks Ended    $676,921      $661,992       2.3%         1.2%