Fresno-based department store Gottschalks Inc. on Thursday appeared to announce it was ending a 13-month search for a buyer, at the same time it reported losses in the second quarter and the first half of 2007.
Gottschalks reported a loss of $4.8 million, or 35 cents per diluted share, in the second quarter of 2007, a sharp turnaround from profits of $486,000, or 4 cents per diluted share, in the same quarter last year.
Losses for the first six months of 2007 were $9.4 million, or 69 cents per diluted share, compared to a loss of $3.5 million, or 26 cents per diluted share, in the same period last year.
"We are disappointed in our results for the quarter," Jim Famalette, Gottschalks chief executive, said in a statement. "We experienced softer sales and gross margin for the quarter, primarily due to weakness in our home store merchandise and select apparel merchandise categories."
The retailer did see gains in cosmetics, dresses and special-sized, children's and intimate apparel, and it expects poorly performing categories to improve in the fourth quarter, Famalette said.
Also Thursday, the company reported it was terminating a special strategic committee whose purpose included contemplating the possibility of selling the publicly traded company.
"We have concluded that focused on new and independent strategic growth initiatives offers a better long-term value for Gottschalks and our shareholders at this time, versus other alternatives proposed and considered," Famalette said.
Instead, the company announced it would institute a "Value Improvement Program" to roll out through the end of next year, focused on a stepped-up store opening schedule, new direction for marketing programs, significant improvements to information technology systems, and better use of the company's real estate assets.
To pay for the program, Gottschalks has signed a commitment letter for $200 million in credit from GE Commercial Finance Corp., the company stated.