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Gottschalks Heads for Liquidation

There was some hope last week that Gottschalks would remain as an operating company. However, that has not come to fruition. The company is opting for liquidation.

Liquidators won the battle for Gottschalks Inc. on Monday and will shut down the company, CEO James Famalette said late Monday.

"It's very difficult to talk right now," said Famalette, his voice shaking, a little more than an hour after the auction ended in Delaware.

He said Gottschalks would begin notifying employees today about what will happen. Going-out-of-business sales could begin as early as this week.

Gottschalks, founded in Fresno in 1904, operates 58 department stores and three specialty stores, including locations in Antioch, Santa Cruz, Stockton and Tracy. It has about 5,200 employees in California, Oregon, Washington, Alaska, Idaho and Nevada.

The liquidators were one of three bidders, including another liquidator and a Chinese company, Shandong Commercial Group, that intended to keep some of the stores open.

"We tried as hard as we could to make this work with the Shandong people, but there were too many things financially, with the size of the deal, and regulatory issues, that they just couldn't get done in time," Famalette said from Delaware.

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Bankruptcies and Liquidations:

Potential Bankruptcies & Liquidation Impact: 942 confirmed closures out of about 2,476 stores

Announced Closings

Total Closings: up to 1,058 U.S. stores

Potential Impact of All Announcements to Date: 2,000 closures out of up to 3,534 potentially affected U.S. stores

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