COURT OK’S GOTTSCHALKS BUY OF 37 LAMONTS UNITS
NEW YORK — Gottschalks Inc. received Seattle bankruptcy court approval on Tuesday to acquire 37 Lamonts Apparel stores for $20.1 million.
The regional department store chain, based in Fresno, Calif., said it will take possession of the store sites on July 24 and convert the sites to the Gottschalks banner. The stores are set to reopen by September. Gottschalks said it plans to improve sales and profitability of the sites by introducing categories such as cosmetics and fragrances. It also expects to include major apparel brands not previously offered by Lamonts and to introduce the Gottschalks private label credit card program. Lamonts is based in Kirkland, Wash.
Liquidation sales — conducted by Gordon Bros. Group and the Nassi Group — will continue at the Lamonts sites through July. The retailer, which filed for Chapter 11 on Jan. 4, received a competing bid from Alama Group LLC/Troutman Investment Co., but the bid failed to meet bankruptcy court overbid procedural requirements.
Under the terms of the Gottschalks purchase, substantially all of the Lamonts store employees will be offered employment with Gottschalks. Lamonts’ unsecured creditors will get an estimated recovery range of between 40 and 50 percent.
Earlier this week, Gottschalks reported it lost $841,000, or 7 cents a share, for the quarter ended April 29, compared with a loss of $1.1 million, or 9 cents in last year’s first quarter. Operating income was up 157.7 percent to $907,000 but was more than erased by interest expense of $2.7 million.
Sales were $120.9 million, an 8.8 percent increase over the $111.1 million of the 1999 period. Same-store sales were up 6.9 percent. Including leased departments and credit revenues, volume was $123.9 million, up 8.2 percent.
Gottschalks currently operates 42 department stores and 20 specialty apparel stores in California, Nevada, Oregon and Washington.