Gottschalks Inc. reported same store sales for the month of January increased 13.3% over the same month last year. Total sales for the four-week period increased 10.6% to $33.3 million compared to $30.1 million in the same period of fiscal 2008.
For the fourth fiscal quarter, which consisted of 13 weeks, same store sales decreased 7.1% and total sales decreased 9.4% to $185.2 million, compared to $204.4 million for the fourth fiscal quarter of 2007. On a year- to-date basis, which consisted of 52 weeks, same store sales decreased 8.8% from the comparable period of fiscal 2007. Total sales on a year-to-date basis decreased 10.4% to $563.2 million compared to $628.5 million in the same period of the prior year. The company operated one less store for the month and the year-to-date periods compared to the same periods in fiscal 2007.
Jim Famalette, chairman and chief executive officer of Gottschalks said, “We are very pleased with our positive sales results for the month. We believe the closure of other retailers in many of our core California markets, benefited our top line performance. Our stores in these locations realized sales gains greater than 15% for the month. This significant top-line growth was accomplished with a lower mark down rate compared to the same period last year. Our best performing categories were special sizes, intimate apparel, better sportswear and home products, excluding big ticket, while children's, furniture and juniors were the most challenging. At the close of the month our inventory was down 21% compared to the same period of the prior year. In the current period, we are experiencing an increased flow of new receipts.”
Update on Reorganization
As previously announced on January 14, 2009, Gottschalks filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code. Subsequently, the company received approval for all of its first day motions from the United States Bankruptcy Court for the District of Delaware, including a $125 million debtor-in-possession (“DIP”) revolving credit facility to supplement its working capital and provide additional liquidity during the reorganization process. Additionally, the company received authority to continue to make wage and salary payments and continue various benefits for employees as well as honor customer programs, such as returns, exchanges and gift cards.
As part of the reorganization process and in collaboration with its advisors, the company is continuing to pursue one or more options to create value for stakeholders, including a sale of its business or other transaction with a third-party investor through a process to be approved by the Court in order to attain the highest and best offer from interested parties. The company is currently in active discussions with potential buyers and it continues to operate business as usual.
