GOTTSCHALKS WON’T BUY HARRIS
FRESNO, Calif. — Gottschalks Inc., the 36-unit regional department store chain based here, has terminated its plan to acquire Harris Co., a smaller California department store chain owned by El Corte Ingles, Spain’s largest retailer.
The companies signed a letter of intent in July but on Friday said they could not agree on the terms of the transaction.
Gottschalks would have acquired the stock of Harris and operated its stores. El Corte Ingles would have received 3 million shares of Gottschalks’ common stock, $11.5 million of 8 percent junior subordinated debt due in 2004 and two seats on Gottschalks’ board. El Corte Ingles was also planning on lending funds to Gottschalks for refurbishing Harris stores.
The 92-year-old Harris chain operates nine upscale stores in inland California and posted $100 million in sales in 1996. El Corte Ingles had sales of $8 billion in 1996. Gottschalks, with moderate-priced stores in California, Washington, Oregon and Nevada, posted $1.8 million in profits on sales of $422.2 million last year.