Women's Wear Daily, a publication covering the retail fashion industry, reports today on its Web site that a potential rescue deal may be near for Fresno-based Gottschalks Inc.
Relying on unnamed sources, WWD.com says Gottschalks has been in discussions since mid-December with Everbright Development Overseas, a Chinese sourcing company, and El Corte Ingles, a Spanish retail company that already owns a 16% stake in Gottschalks. The report says the three companies were expected to vote on a deal soon, "possibly as early as today."
Gottschalks Chairman Jim Famalette and Chief Operating Officer Greg Ambro could not be reached for comment this morning.
WWD.com also cites unnamed sources reporting that Gottschalks stopped paying its merchandise vendors last month to conserve cash and was negotiating with suppliers to keep goods flowing to its stores.
Gottschalks, founded in 1904, operates 58 department stores and three specialty apparel stores in six western states. On Thursday, the company reported its same-store sales in December -- crucial to retailers because of the holiday shopping season -- were down 9.6% from the same month in 2007.
In its quarterly earnings report last month, company officials expressed doubt Gottschalks would have enough cash to make it through the end of this month unless additional sources of cash or credit could be secured. One hope at that time was the investment deal with Everbright.
In November, Gottschalks announced an agreement with Everbright for an investment of up to $30 million in the American retailer in exchange for a 75% majority stake in the company. But Everbright terminated the deal in mid-December.
Gottschalks officials have offered no comment on the status of talks since Dec. 19, when they reported that negotiations continued Everbright and an unnamed third party.