Forever 21 and Macy's Moving Into Gottschalks' Stores
Forever 21 is expanding its dream to become a big department-store chain by acquiring several leases and stores vacated by bankrupt retailer Gottschalks.
On June 10, a U.S. Bankruptcy Court judge in Delaware cleared the way for fast-fashion retailer Forever 21 in Los Angeles to buy or take over the leases for 10 Gottschalks stores in California, Washington and Alaska for $16.2 million, said Forever 21 Executive Vice President Larry Meyer.
The three stores that were purchased are in San Luis Obispo, Yuba City and Hanford, Calif. The seven leases are for California stores in Modesto, Fresno, Chico, Riverside, Hemet and Bakersfield, plus a store in Anchorage, Alaska.
Meanwhile, Macy’s Inc. successfully bid $2 million for two of Gottschalks’ leases in Fresno and Visalia, Calif., said Macy’s spokesperson Jim Sluzewski. After some remodeling, Macy’s hopes to be in the River Park store in Fresno and the Visalia Mall before the 2009 holiday season starts.
Gottschalks, the 105-year-old department-store chain based in Fresno, Calif., filed for bankruptcy protection in mid-January. At the time, it had 58 department stores and three specialty stores in the West.
Forever 21 was founded by Don Chang, who started his company in 1984 with a small store in Los Angeles and branched out to mall-based boutiques that were modest in size. But in recent years, Chang has been beefing up his retail empire by opening larger stores the size of modest department stores. In 2007, his company took over the former Saks Fifth Avenue site in Pasadena, Calif., stocking the large two-story building with women’s, men’s and children’s accessories and clothes.
Forever 21 also acquired 14 Mervyns leases last year after that retailer went bankrupt. —Deborah Belgum
