MARYSVILLE — Gottschalks Inc., which has an outlet at the Marysville Mall, announced March 31 that it is proposing liquidating assets pending the approval of a bankruptcy court.
The U.S. Bankruptcy Court for the District of Delaware approved the proposed liquidation April 1. Liquidation began April 2 and is expected to conclude on or before July 15. Gottschalks filed to reorganize under Chapter 11 Jan. 14 in that same bankruptcy court.
“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,” Jim Famalette, chair and chief executive officer of Gottschalks, stated March 31. “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 had spoken with a Chinese government-owned conglomerate, the Shandong Commercial Group General Corp., about a potential buyout, but instead, the regional department store chain will be selling its merchandise and other items at its retail stores and distribution center.
Gottschalks is based in Fresno, Calif., and currently operates 55 department stores and three specialty apparel stores, with a total of approximately 5,200 employees, in six Western states, including seven in Washington, two in Idaho, and five each in Oregon and Alaska. According to its Jan. 14 bankruptcy petition, Gottschalks had assets of $288.4 million and debts of $197.1 million. The company has agreed to have its assets purchased by a consortium of buyers comprised of liquidation specialists SB Capital Group LLC of New York, Tiger Capital Group LLC of Boston, Great American Group LLC of Los Angeles and Hudson Capital Partners LLC of Massachusetts.