As Gottschalks approached a do-or-die deadline Wednesday, two possible buyers emerged, including a Chinese retail group that might keep the department-store chain alive.
The Fresno-based retailer, which filed for bankruptcy in mid-January, is to be sold at auction Monday, for liquidation in a going-out-of-business sale or as a going concern.
Gottschalks operates 58 department stores — including two in Modesto — and three specialty stores in six Western states.
Companies interested in bidding for Gottschalks had until 2 p.m. Wednesday to declare their interest. Names of potential bidders are to be announced today.
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If none steps forward, the company would be turned over to a consortium of liquidators, which would sell off its inventory and shut down the business by July.
Lawrence Gottlieb, a New York bankruptcy lawyer who represents the company's creditors, said he knew of two potential suitors: Gordon Brothers Group, a liquidation company based in Boston, and an unnamed Chinese group.
Gottlieb said he was unaware that any had submitted proposals by the deadline.
"But I think we need to have a little flexibility on that," Gottlieb said. Proposals might not be submitted to Gottschalks' representatives until early today, he said.
Gottschalks Chairman and Chief Executive Officer James Famalette, in an e-mail, confirmed that the company was expecting proposals from at least two would-be bidders. He also said Wednesday's deadline had been set by the company and was flexible.
Famalette would not name the Chinese group but said it has retail operations and is interested in bidding for Gottschalks as a going concern. He said it was not the Everbright Group, a Chinese company with which Gott- schalks negotiated a potential partnership in late 2008.
Gottschalks and Everbright Development Overseas Ltd. had a tentative agreement for Everbright to provide a $30 million investment in exchange for a majority ownership stake in Gottschalks, but Everbright canceled the deal in December.
Last week, financial news service Bloomberg reported that three other firms were evaluating Gottschalks' finances in anticipation of possible bids to continue operating at least some of the chain's stores.
Gottlieb discounted that report, which identified Golden Gate Capital Corp. of San Francisco, Illinois-based GK Development Inc. and El Corte Inglés, a Spanish retail conglomerate that owns about 16 percent of Gott- schalks' stock.
"I'm not familiar with those companies," Gottlieb said. "I wouldn't bet on getting any bids from them."
According to court records, Gottschalks estimates it owes its unsecured creditors more than $54 million for debts accumulated before it filed its bankruptcy petition. The company says its total liabilities exceed $209 million.
Earlier this month, Gott- schalks selected a consortium of liquidation companies to be the lead bidder for Monday's auction. If no other bidders step forward, that group — the same companies that conducted going-out-of-business sales for retailers including Circuit City and Mervyn's — is ready to sell off the merchandise and close Gottschalks' stores by mid-July.
Gordon Brothers, identified by Gottlieb as a would- be bidder, has been involved in high-profile retail asset dispositions including Bombay Co., Discovery Channel stores, CompUSA and Good Guys electronics stores.