Gottschalks Delisted from NYSE
Leaders of troubled department-store chain Gottschalks Inc. said they would appeal its recent delisting from the New York Stock Exchange, which is scheduled to take place Oct. 27.
In a press release, the retailer pledged that trading for its stock would continue during the NYSE review. Gottschalks, based in Fresno, Calif., filed a request to be traded on the OTC Bulletin Board, which trades in penny stocks. Companies are delisted from the NYSE when their market capitalizations fall below $25 million, which is what happened to Gottschalks, or their stock falls below a $1 a share. On Oct. 23, Gottschalks’ stock closed at 97 cents a share.
Gottschalks Chairman Jim Famalette said the 104-year-old retailer would weather this storm. “We remain committed to managing the areas of our business within our control,” Famalette said in a statement. On Sept. 5, the retailer sold its Palmdale, Calif., store to Forest City Enterprises for $12 million. Gottschalks said it would use the funds to pay down its debt.
Famalette also said Gottschalks was negotiating with Everbright Development Overseas LTD., a Chinese company, for a $30 million cash infusion and higher access to overseas factories. However, Gottschalks said there is no schedule to finish the deal.
On a happier note, Gottschalks opened a 55,000-square-foot store in Bend, Ore., on Oct. 23. It currently has 54 department stores and 11 specialty stores in its chain.
The NYSE appeal process might prove tough for Gottschalks, according to retail analyst Jeffrey Van Sinderen of B. Riley & Co. in Los Angeles. Once a company is delisted, it is rare they will find a place on the exchange again, he said. —Andrew Asch
