Gottschalks inks $3 million investment from Chinese firm

The Fresno Bee
Gottschalks announced Friday that a Chinese company has agreed to invest $30 million in the financially troubled Fresno-based department store chain.

Gottschalks and Everbright Development Overseas Ltd. also will team up to establish direct sourcing and consignment product sales at Gottschalks and launch a new wholesale business.

According to a news release, Everbright's investment will include a $15 million acquisition of newly-issued shares of Gottschalks common stock.

Gottschalks and Everbright had been working on a deal since late September.

Earlier this month, Gottschalks reported a 13.4 percent decline in sales in October from the same period a year earlier. For the 2008 fiscal year that began in February, total sales were $378 million, down 10.9 percent from 2007. The last time Gottschalks registered a monthly sales gain over the previous year was March 2007.

"We are very pleased to have reached this definitive agreement with Everbright," Gottschalks chairman Jim Famalette said in the release.

"This strategic business partnership will enable us to leverage Everbright's international sourcing network to enhance our operations and also provide our customers with new quality products at very attractive price points."

Everbright Chairman Mai Wong said in the release: "We are especially pleased to be able to leverage Gottschalks' business to expand our exclusive consumer membership program, which was developed by Everbright in China over the last eight years, and is a driving aspect behind Everbright's investment in Gottschalks."

Gottschalks operates 59 stores in California, Oregon, Washington, Alaska, Nevada and Idaho, as well as three specialty apparel stores.