The Retail Bust is Coming to a Location Near You

[Guest Ron_*]

I see more and more empty stores everywhere. The only one that is left standing is ChinaMart.

[Guest Maxed Out]

Bankruptcies, bailouts, bank failures, and budget spending that exceeds anything seen in this country’s history are causing consumers to hide their money under the mattress.

[Guest Fiona Dias]

Closing Stores

 

Gap (85)

Disney (98)

Talbot’s (78)

KB Toys (356)

Starbucks (600)

Ann Taylor (117)

Super Cuts (160)

Foot Locker (140)

Sprint Nextel (125)

Kirkland's (30-100)

Pacific Sunwear (153)

Wilson’s Leather (158)

Piercing Pagoda/Zales (105)

Lane Bryant/Fashion Bug (150)

 

Bankrupt Stores

 

Uni-Mart

Fortunoff

CompUSA

Friedman’s

Lillian Vernon

Movie Gallery

Sharper Image

Levitz Furniture

Steve & Barry’s

Linens & Things

Goody's Clothing

Wickes Furniture

Bombay Company

Harvey Electronics

 

http://www.gsicommerce.com

[Guest DC Government Worker]

Retail trade employment fell by 48,000 over the month. Since peaking in November 2007, employment in the industry has declined by an average of 44,000 per month. In March, employment decreased in building material and garden supply stores (-13,000), automobile dealerships (-12,000), and electronics and appliance stores (-10,000). Employment in wholesale trade fell by 31,000 in

March, with nearly all of the decline occurring in durable goods.

[Guest Jax]

Sears recently revived a savings plan it used many years ago, known as the "Layaway program," under which a consumer can make a down payment on an item that is then held for him for a fixed period while he saves the rest of the cash needed to buy it.

[Guest C. Hoffman]

With many in the industry clearing shelves at great markdowns, it won't be until earnings are released that we'll know whether the industry has any signs of health or is just pushing product but losing money at the same time. It's that old saying "we lose money but make it up on the volume" that destroyed many a troubled chain of stores.

[Guest MTScribe]

If people would shop local retail stores instead of changing over to Walmart or Target when those chains come to town, this would not be happening. But a LOT of people talk about how vital these small chains/independents are but then they stopped using them. People talk a big game but when it comes to putting their money where their mouth is, they are just that: all talk.

[Guest Lonigan]

Better get used to Walmart being the only show in town...

[Guest LAW_*]

Another American icon goes under. Gottschalks, a regional retailer with 58 stores anchoring main streets in far-flung towns across the West, has been turned over to a team of liquidators after 105 years being in business.

 

 

FOR: GOTTSCHALKS INC.

CONTACT: Gregory Ambro

Executive Vice President, Chief Operating Officer (559) 434-4800

FD: Leigh Parrish, Stephanie Rich

(212) 850-5651, (212) 850-5706

DISTRIBUTION: NORTHERN CALIFORNIA NEWS LINE: SFGOT/ESFGOT

FOR RELEASE ON TUESDAY, MARCH 31 at 4:00 A.M. E.D.T.

GOTTSCHALKS COMPLETES BANKRUPTCY AUCTION

 

~ Court To Consider Approval of Liquidation on April 1st~

FRESNO, CA – March 31, 2009 – Gottschalks Inc. (Pink Sheets: GOTT.PK) today announced that, after completing the Court-supervised auction for its business, the Company, in consultation with the agent for its senior secured lenders and the unsecured creditors’ committee, has agreed to the proposed liquidation of certain of the Company’s assets by a joint venture comprised of SB Capital Group, LLC, Tiger Capital Group, LLC, Great American Group, LLC and Hudson Capital Partners, LLC. As proposed, the joint venture would be appointed by the Company to conduct the sale of merchandise located at the Company’s retail stores and distribution center and to dispose of certain of the Company’s furnishings, trade fixtures and equipment.

 

The proposed liquidation remains subject to the approval of the Bankruptcy Court for the District of Delaware, which is scheduled to consider the proposed liquidation on Wednesday, April 1, 2009. If approved, the liquidation may begin as early as Thursday, April 2, 2009 and is expected to conclude on or before July 15, 2009.

 

Jim Famalette, Chairman and Chief Executive Officer of Gottschalks, stated, "Despite all our efforts at earnest negotiations, we were unable to reach an agreement with our creditors, lenders and bidders to structure a going concern bid by the Court-imposed deadline. Regrettably, liquidation is now the only path for our Company. We are deeply disappointed with this outcome and the impact it will have on our employees, customers, business partners and the communities we have served for 105-years."

 

Gottschalks filed to reorganize under Chapter 11 on January 14, 2009 in the United States Bankruptcy Court for the District of Delaware. The complete filing can be viewed at http://www.kccllc.net/gottschalks.

 

About Gottschalks

Gottschalks is a regional department store chain, currently operating 55 department stores and three specialty apparel stores in six western states, including California (38), Washington (7), Alaska (5), Oregon (5), Nevada (1) and Idaho (2). Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. Gottschalks offers corporate information and selected merchandise on its website located at www.gottschalks.com.

 

Business Risks and Forward Looking Statements

 

This release contains forward-looking statements (within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. In some instances, such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “believes,” “intends,” “projects,” “forecasts,” “plans,” “estimates,” “anticipates,” “continues,” “targets,” or similar terms, variations of such terms or the negative of such terms. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements, including, without limitation, the Company’s ability to meet debt obligations and adhere to the restrictions and covenants imposed under its various debt agreements; the timely receipt of merchandise and the Company’s ability to obtain adequate trade credit from its key factors and vendors; risks arising from general economic and market conditions (including uncertainties arising from acts of terrorism or war); the ability to improve the profitability and cash flows of its stores or to sell, sublease or close underperforming stores; the ability to modify operations in order to minimize the adverse impact of rising costs, including but not limited to health care, workers’ compensation, property and casualty insurance and utilities costs; the effects of seasonality and weather conditions, changing consumer trends and preferences, competition, consumer credit, the Company’s dependence on its key personnel and general labor conditions, all of which are described in more detail in Gottschalks’ Annual Report on Form 10-K and other reports filed by Gottschalks with the Securities and Exchange Commission. GOTTSCHALKS DOES NOT PRESENTLY INTEND TO UPDATE THESE STATEMENTS AND UNDERTAKES NO DUTY TO ANY PERSON TO EFFECT ANY SUCH UPDATE UNDER ANY CIRCUMSTANCES.

[Guest Stoltz]

I do not know that chain. But, I do know walmart, kmart, costco, and target have changed the retail landscape... but I still like the smaller stores for their diversity and personal connections. Feel like a robot at the big stores.

[Guest Camorra]

Discretionary consumption has always been price sensitive. The sheer volume of wholesale purchasing that Walmart engages in, leads to a vassalage system. The vendors who do business with big box stores enter into Faustian bargains with their huge clients. They land a vendor deal with a box store, the business seems great because it's huge and allows the supplier to finance tooling up. Only, now they are stuck with a client whose business is critical to the functioning of their enterprise. The box store secures massive leverage in pricing over the vassal vendor. "We need you to shave the price on your catsup or we have to go to another provider." Vendor: "Done, we'll take five percent off." Box Store: "We'll need a 15% discount, but we'll make it worth your while by tripling our commitment to you. We'll buy 200% more if you shave 15% off." Vendor: "Done."

[Guest OID]

During December, January and February luxury department stores posted declines of 19.2 percent, 17.7 percent and 17.4 percent compared with the same months last year, according to data compiled by ICSC. Saks Fifth Avenue, which reported a 26 percent dive in comparable store sales in February and may be forced into bankruptcy.

[Luke_Wilbur]

Now with Circuit City gone I wonder who will be getting their business. Best Buy? Walmart? Target?

[Guest Human_*]

I won’t go to bestbuy,Walmart, or Target, But I WILL go to Microcenter. They can fill that gap easy.

 

Microcenter has a good selection, staff is good too. Prices are competitive.

---------------------------------------------------------------------------------------------------------------------

Now with Circuit City gone I wonder who will be getting their business. Best Buy? Walmart? Target?

[Raven]

The smaller stores are really good, but one of the problems it is hard to find some sizes without ordering them online. Woman who are over 5'5" it is hard to find long slacks, hard to find slacks or jeans that come to the normal waist. I am tired of worrying about weather my slacks or jeans are going to fall down with or without a belt.

 

But the thing that really bothers me the most is what happened to the tags "MADE IN THE USA"? So if anyone out there knows where to buy American make cloths for woman over 5'8" that are not skin tight, that will be below the ankles, and where you do not have to worry about them falling off when let me know.

 

I do not know that chain. But, I do know walmart, kmart, costco, and target have changed the retail landscape... but I still like the smaller stores for their diversity and personal connections. Feel like a robot at the big stores.

[Guest Wes]

The Levi’s Store

3263 M St NW

Washington, DC 20007

Telephone: 202-965-1580

 

Jean Machine offers trendy clothing for teens and young adults.

Address: 1100 South Hayes Street

Store #327

Arlington, VA 22202

 

Reclaim Clique Clothing

(301) 309-1242

10 Lamp Post Ct

Potomac, MD 20854

 

Lucky Brand Jeans

(202) 333-6377

3271-73 M St Nw

Washington, DC 20007

[Guest Juli]

I refuse to shop the big boxes; I instead patronize my local retailers whether for books (used book stores are my favoriet haunt), prescriptions (talking to a pharmacist who sees you as a human being instead of just another sale is a much more comforting feeling of being in good hands), cards and gifts (is there any holiday, special occasion or observance that the big plastic Gallmark "Gold" store hasn't cashed in on?), or clothing (the $180 blouse you bought at Nieman Marcus is the same blouse and was made in the same factory as the one I bought for $120 at my local women's shop, where the clerk brought me various styles to try on while I was in the dressing room instead of my having to get fully dressed each time I needed to leave the dressing room to look for something else, which descriobes the stellar service you receive at most of those big box retailers that have to add the cost of mall space and corporate overhead to the price tag that independent retailers don't).

[Guest Maxwell]

I just read that Virgin Megastores are going out of business. I went to the one at Union Square. It was very pricey.

[Guest LAW_*]

Borders recent fourth-quarter earnings announcement was not impressive with consolidated sales down 12.9% to $1.1 billion from a year ago.

 

The company closed 84 Waldenbooks Specialty Retail locations in the fourth quarter, bringing the fiscal 2008 closure total to 112. Borders Group ended fiscal 2008 with a total of 386 locations in this segment.

 

Outlook

 

"In this economy, we expect sales trends to continue to be negative throughout 2009 and will manage the business accordingly," said Marshall. "We have planned only minimal capital expenditures and will continue to hold the line on our deeply reduced cost structure while remaining engaged with our vendors and others as we work to get the company on more firm financial footing. In addition, our efforts to drive the top line and improve margins will continue to intensify as we move forward."

 

http://www.borders.com/online/store/PartnerSiteInvestorsView

[Guest Alan N]

The Boston Globe reported on Apr. 2 that Filene's Basement is facing the possibility of bankruptcy. Reportedly, the discount department store chain owes back payments to vendors and has yet to obtain enough funds to settle these debts. A representative of Retail Ventures reportedly said the company needs more liquidity. The retailer recently closed 11 of its 36 stores.

[Luke_Wilbur]

History seems to always repeats itself. When Rome emerged as a superpower, it opened up the foreign markets. Cheap grain flooded into Italy that eventually drove the native farmer out of business. The rural unemployed fled into the city look for jobs, but there were none to be given. Government leaders handed out free grain in attempt to calm the growing mob.

Edited April 7, 2009 by Luke_Wilbur

[Guest LAW_*]

The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households.

 

The index for apparel turned down in March, declining 0.2 percent after rising 1.3 percent in February. Apparel prices rose 3.1 percent in March and were up 1.4 percent over the past year.

[Luke_Wilbur]

GENERAL GROWTH PROPERTIES, INC. (NYSE: GGP) (“GGP”) today announced that it is voluntarily seeking relief to reduce and restructure its debts under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. In addition, approximately 158 regional shopping centers owned by GGP and certain other GGP subsidiaries (collectively with GGP, the “Company”) have also filed for protection. The Company intends to work with its constituencies to emerge from bankruptcy as quickly as possible while executing on a plan of reorganization that preserves the Company’s integrated, national business operations.

Certain subsidiaries, including GGP’s third party management business and GGP’s joint ventures, have not filed for protection. A complete list of subsidiaries that have filed voluntary petitions can be found at www.ggp.com.

 

All day-to-day operations and business of all of the Company’s shopping centers and other properties will continue as usual.

 

The decision to pursue reorganization under chapter 11 came after extensive efforts to refinance or extend maturing debt outside of chapter 11. Over many months, the Company has endeavored to negotiate with its unsecured and secured creditors to obtain the time needed to develop a long-term solution to the credit crisis facing the Company. Unable to reach an out-of-court consensus, the Company reluctantly concluded that restructuring under the protection of the bankruptcy court was necessary. During the chapter 11 cases, the Company will continue to explore strategic alternatives and search the markets for available sources of capital. The Company intends to pursue a plan of reorganization that extends mortgage maturities and reduces its corporate debt and overall leverage. This will establish a sustainable, long-term capital structure for the Company.

 

The Company also announced that it has received a commitment for a debtor-in-possession financing facility of approximately $375 million from Pershing Square Capital Management, L.P., as agent. When approved by the bankruptcy court, the new facility will provide a source of funds to the Company during the chapter 11 process. The Company has requested, and expects to receive, additional approvals to give the Company the authority to make payments to ensure that the Company’s shopping centers and other properties continue to operate uninterrupted in the ordinary course of business, including paying employee compensation, certain critical service providers, insurance and other claims. The Company intends to pay all providers of goods and services delivered post-petition.

 

“Our core business remains sound and is performing well with stable cash flows. We believe that chapter 11 is the best process for restructuring maturing mortgage loans, reducing the Company’s corporate debt, and establishing a sustainable, long-term capital structure for the Company,” said Adam Metz, Chief Executive Officer of the Company. “While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of chapter 11,” he said.

[Guest Krissmand]

Retail Stores need to get back to what makes people love. Mall stores should focus on how people use products and clothes and not focus on endless rows, racks, and stacks of boxes on the shelves.

Go to MAC store and see how it should be done. Oh. Make sure the staff are not completely braindead.

[Guest Enron]

Pershing Square Capital Management has in the recent past acquired positions in Wendy's International Inc., McDonald's Corporation and Ceridian Corp., pressuring management of those companies to improve profits by cutting costs or selling divisions.

 

William Albert Ackman (born 1966, New York) is a major investor in and the founder and CEO of hedge fund Pershing Square Capital Management LP. As of December 2007 his funds own a 10% stake in Target Corporation, valued at $4.2 billion.

 

Pershing Square Capital Management has in the recent past acquired positions in Wendy's International Inc., McDonald's Corporation and Ceridian Corp., pressuring management of those companies to improve profits by cutting costs or selling divisions.

 

WMAC Investment Corp., a subsidiary of Leucadia National, is the largest backer of Pershing Square Capital Management L.P. Leucadia is known as a "mini Berkshire Hathaway" with an average annual return of over 22%.

 

http://www.leucadia.com/