Gottschalks still has plenty of merchandise to sell

The discounts are deeper and shelves still full as Gottschalks rolls into the sixth week of its going-out-of-business sale.

The Fresno-based retailer's two Modesto stores still have plenty of merchandise on display and choices on the racks. Sales now tout "at least 40 to 70 percent" off -- and an asterisk noting that, yes, "some exclusions apply."

Since the company's April 1 order to liquidate was issued, the chain's 58 department stores have been selling off their inventory.

In a letter to the Stanislaus County Board of Supervisors, Gottschalks executives gave June 1 "or within 14 days of that date" as the deadline for closing all its stores.

A consortium of liquidators -- SB Capital Group of New York, Tiger Capital Group of Boston, Great American Group of Los Angeles and Hudson Capital Partners of Newton, Mass. -- is running the liquidation.

The consortium and Gottschalks corporate headquarters did not return phone calls inquiring about the progress of the liquidation.

At the sale's start, most merchandise was 10 percent to 20 percent off the starting prices the liquidators set. As expected, as the sale goes longer, the cuts have gotten bigger and shoppers are sensing better bargains.

Ripon resident Suzanne Nichols, a longtime Gottschalks shopper, browsed the Vintage Faire Mall store this week, one arm draped with clothes to try on. She said the sale was bittersweet.

"I think the prices are great, but I'd rather the store stay open," she said. "I'm really sad it's closing."

Only a handful of empty shelves could be seen at the mall store, with everything from shirts to sundresses, sunglasses and slingbacks on sale.

Stock level looks unchanged

Across town at the Century Center store, if it weren't for the huge yellow "Going Out of Business" signs hanging everywhere, supply levels would seem, at first glance, almost indistinguishable from pre-liquidation days.

Most name-brand cosmetics are marked down 25 percent. Clinique and Estée Lauder products, however, are not on sale. The biggest discounts, at 70 percent, can be found only on the clearance racks.

Eagle-eyed shoppers will notice a few interesting additions. The Vintage Faire and Century Center stores began selling fur jackets and coats when the liquidation started. The stock was brought in from the liquidators' other inventory for sales.

Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm based in New York, said it's not uncommon for liquidators to bring in outside inventory. If a company has multiple stores in town, he said, the two can be consolidated once the amount of merchandise at one location dips low enough.

He said most liquidation sales don't go past their initial court deadline, in this case June 1. But if not enough stock is sold, the liquidators can ask for an extension.

"It's an impossible thing to know (the end date) in advance; you don't know the rate at which you'll sell your inventory," Davidowitz said. "But there is no way to sell everything. The point is, they'll sell as much as they can sell. The rest is a tax deduction, given to charity or something else.

"It's a messy process."

Bee staff writer Marijke Rowland can be reached at mrowland@modbee.com or 578-2284.

This story was originally published May 9, 2009 at 12:29 PM with the headline "Gottschalks still has plenty of merchandise to sell."