Gottschalks took another step toward oblivion as a Bankruptcy Court judge Wednesday cleared the way for Macy's and Forever 21 to buy 15 stores in California, Washington and Alaska.
That will give the bankrupt 105-year-old Fresno retailer millions of dollars to help repay creditors.
Macy's, the national department-store giant headquartered in Ohio, and Los Angeles-based clothier Forever 21 were the prevailing bidders in a May 28 auction for unexpired shopping-center leases and real estate owned by Gottschalks. But the deals could not be sealed without court approval.
Gottschalks Chief Executive Officer James Famalette confirmed Wednesday that the judge OK'd the deals.
Macy's is putting up an estimated $2.2 million, in its bid and other expenses, to take over Gottschalks' leases at River Park shopping center in north Fresno and at Visalia Mall, according to documents filed in U.S. District Bankruptcy Court in Delaware.
Forever 21's bid and other costs to take over 13 stores, including the lease at Vintage Faire Mall in Modesto, are valued at almost $17.2 million, court records show. It paid $243,384 for the Vintage Faire lease.
There was no bid for the Gottschalks store at Century Center in east Modesto. That site includes three adjoining spaces Gottschalks expanded into over the years as other tenants moved out. The two Modesto sites were among the chain's top performers.
Kimco Realty of New York owns Century Century and reportedly thought Forever 21 was interested in the east Modesto site, but the retailer opted for the much larger Vintage Faire anchor spot, which fronts onto Highway 99.
Forever 21 typically occupies smaller stores, but company officials have said they have enough merchandise and customers to justify the move to larger sites. They said they plan to add merchandise to fill those spaces.
Besides two locations in Fresno and Kings counties, Forever 21 is acquiring owned real estate in San Luis Obispo and Yuba City, and Gottschalks leases in Anchorage, Alaska; Union Gap, Wash.; and Sacramento, Davis, Chico, Bakersfield, Riverside and Hemet. The sales could close by late this week, according to court records.
It's unclear when Forever 21 or Macy's would open in any of the locations, because liquidators still are holding going-out-of-business sales at most of Gottschalks' 58 stores to clear out merchandise, fixtures and equipment. Those sales are supposed to be completed by mid-July.
When Gottschalks filed for bankruptcy protection in mid-January, it operated 58 department stores and three specialty stores in the West. But most of the stores, as well as Gottschalks' corporate headquarters in north Fresno and its distribution center in Madera, attracted no bids in the May 28 auction, leaving it unclear what will happen to the properties.