Gottschalks Reports First-Quarter Loss
Department-store chain Gottschalks Inc. reported a 10.3 percent decline in its same-store sales for its first quarter of 2008. The results were reported during a May 29 conference call with retail analysts.
In the first 13 weeks of the 2008 fiscal year, the Fresno, Calif.–based company had a $5.1 million loss on $125.1 million in sales, compared with a $4.7 million loss on $141.8 million in sales during the same period last year.
The 103-year-old retailer has been steadily losing money since 2005, but Gottschalks Chairman and Chief Executive Officer Jim Famalette reported a sunnier outlook for the upcoming year. “We’re better prepared to deal with the macroeconomic environment than we were one year ago,” he said.
In late 2007, Gottschalks’ board of directors approved a value-improvement program to help the retailer return to prosperity. The program seeks to find new funds of revenue by selling or leasing some of its property. The company also plans to close more-poorly performing stores. It said it will close two stores after the leases expire in the second quarter of fiscal 2008.
The retailer found some savings by cutting inventory. Gottschalks reduced its inventory by 10 percent at the end of the first quarter. The retailer also saved $1 million after cutting its workforce at its Fresno headquarters.
Gottschalks’ improvement plan envisions the retailer offering smaller stores and more soft goods next year. The company’s best-selling items were cosmetics, intimate apparel and housewares. The retailer’s worst-performing categories were textiles and furniture. —Andrew Asch
