Women’s clothing retailer Forever 21 has submitted a bid in bankruptcy court to take over 16 Gottschalks stores, including the one at Vintage Faire Mall.
Gottschalks’ second Modesto store at Century Center and its stores in Merced and Sonora are not part of the bid.
Forever 21 — which is known for its trendy fashion and low prices — wants to create expanded versions of its stores, something the retailer recently started doing since buying 15 Mervyn’s out of bankruptcy in January.
The Los Angeles-based company filed a “stalking horse” bid for the Gottschalks spaces, which means Gottschalks would have to pay Forever 21 a fee — $354,000 in this case — if it accepts another bid.
Gottschalks supports the $17.7 million bid, which would enable Forever 21 to buy three properties — Hanford, San Luis Obispo and Yuba City — and take over 13 rental locations.
A hearing is scheduled today in bankruptcy court in Delaware on Forever 21’s bid.
Felicia Perez, the Forever 21 manager at Vintage Faire, said she didn’t know about the bid to acquire the Gottschalks stores but said business is good at her store, and it has outgrown its 6,000 square feet of space.
“We haven’t heard about it,” she said Thursday. “I just know we are expanding. I just don’t know when and where.”
A Vintage Faire official also said she had not heard about the proposal.
Gottschalks is trying to unload 58 department stores and three specialty stores as part of its bankruptcy.
Gottschalks stores are much larger than most Forever 21 stores. Opening in such a space is new for the retailer but part of its broader strategy to expand.
Fourteen of the 15 former Mervyn’s have opened with the new concept, said Forever 21 executive vice president Larry Meyer.Although Forever 21 usually caters to women, the larger stores would include menswear.
Bankruptcy courts and bankrupt retailers tend to look favorably upon bidders buying large lots of stores, said Scott Testa, a professor of marketing at St. Joseph’s University in Philadelphia.
Gottschalks Chief Executive Officer Jim Famalette said: “It’s good news because all of us want these stores continuing to operate and people continuing to have jobs.”