Gottschalks sharpens promotions as losses mount
Staff Staff -- Furniture Today, December 5, 2008
Fresno, Calif. -- To maximize on an otherwise lackluster holiday selling season, Gottschalks this month started courting former Mervyns shoppers with a special marketing effort, anted its television marketing campaign, and brought inventories to “appropriate levels,” the 59-unit regional department store said during its third quarter earnings call yesterday afternoon.
Gottschalks’ early holiday selling season has produced mixed results, said James Famalette, chairman and ceo.
“We generated strong sales on Black Friday as customers responded to the many special promotions,” he said. “However, we did see sales begin to slow during the rest of the weekend. We’ve planned our marketing campaign to maximize sales during December as we take advantage of two additional shopping days before Christmas to drive traffic into our stores and increase sales.”
The retailer reported a quarterly loss of $10.1 million, or 76 cents per diluted share, compared to a loss of $4.1 million, or 30 cents, in the year-ago period. In 2008 year-to-date, the net loss was $19.7 million, or $1.48 per share, deepened from the loss of $13.6 million, or 99 cents, one year ago.
Quarterly sales fell 13.3% to $119.1 million; comps decreased 12.1%. Year-to-date sales fell 10.9% to $378.0 million with comps down 9.7%.
Looking ahead to the new year, Gottschalks is bracing for “an unfavorable economic backdrop.” The company, he said, is feeling more secure having recently signed off on a definite agreement for up to $30 million in investment in the retailer by Everbright Development Overseas Ltd. Famalette said this proposed transaction remains subject to customary closing conditions, including approval of shareholders, receipt of third party consents, and a diligence review that expires on Dec. 15.
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