NEW YORK — Gottschalks Inc. hopes that proprietary products will help it work its way back from a restructuring-impaired fourth-quarter loss.
This story first appeared in the March 11, 2003 issue of WWD. Subscribe Today.
Net losses for the quarter ended Feb. 1 reached $4.2 million, or 33 cents a share. This compared with year-ago earnings of $10.4 million, or 82 cents.
Reducing the firm’s net by $12.4 million, or 97 cents a share, were items including a charge to close six stores in the Pacific Northwest, costs related to a sale of the firm’s credit card receivables, an impairment charge of long-lived assets in underperforming stores and a charge for the early extinguishment of debt.
Without these and items in the year-ago period, Gottschalks income dropped 24.1 percent to $8.2 million, or 64 cents a share, from $10.8 million, or 85 cents, a year ago.
Revenues fell 3.3 percent to $236.5 million from $244.6 million a year ago. Comparable-store sales dipped 1.8 percent.
Last month, Gottschalks laid out a five-point strategy to beef up its operations. “We have positioned the organization to effectively operate in an uncertain economy and have strengthened the company for the long-term,” said president and chief executive Jim Famalette.
Besides selling its private label credit card business for $102.8 million, Gottschalks, under the plan first laid out on Feb. 3, has streamlined its store base, reduced selling, general and administrative expenses by $15 million this year and restricted planned capital expenditures primarily cover the maintenance and improvement of the existing store base.
Additionally, the regional department store player, in an effort to differentiate its offering, will more aggressively pursue private label brands. Private label sales in 2003 are slated to grow by 15 percent to about $80 million, or almost 12 percent of total owned sales.
“Our recent financial and strategic initiatives have substantially reduced our debt and improved our liquidity and the company enters this new fiscal year in much better financial health than in recent years,” said Famalette.
For the year, losses mounted $11.6 million, or 91 cents a share, and compared with year-ago earnings of $425,000, or 3 cents a share. Revenues for the 12 months retreated 2.8 percent to $703.2 million from $723.2 million in 2001.