Gottschalks announced that July 2003 same store sales increased 0.1% from the prior year. Total sales decreased 2.8% to $42.0 million from $43.2 million in July 2002. During the month the Company operated seven fewer stores than in the same period of 2002.

“Comparable store sales for the month of July as well as the second quarter met our expectations,” said Mr. Jim Famalette, president and chief executive officer of Gottschalks. “Merchandise categories with the greatest sales increases over the prior year included juniors, dresses, women's special sizes and furniture. We remain focused on the initiatives we established in our 5-Point Strategic Plan in February, and we are pleased with the progress we have made during the first half of the year.”

For the thirteen weeks ended August 2, 2003, same store sales were 0.4% higher than the prior year, and total sales decreased 2.5% to $152.0 million from $155.9 million in same period of 2002. For the year-to-date period, same store sales decreased by 1.7%, while total sales decreased 4.2% to $292.6 million from $305.4 million for the same period last year. On a quarter and year-to-date basis the decrease in total sales is partially attributable to the closure of seven stores which were open in the comparable period last year.

                                                                Same Store
                              August 2,   August 3,    Total %     Sales %
                               2003          2002     Increase/   Increase/
                                                     (Decrease)  (Decrease)
                                  (in 000's)

    Sales, 4 Weeks Ended       $42,025     $43,218     (2.8%)       0.1%

    Sales, 13 Weeks Ended     $151,972    $155,855     (2.5%)       0.4%

    Sales, 26 Weeks Ended     $292,591    $305,428     (4.2%)      (1.7%)