Retailers, consumers and prices
Check out the latest liquidation sale in the retail world.
U.S. regional department store chain Gottschalks will be liquidated after it failed to attract a buyer willing to operate the company as a going concern, the creditors’ committee said. Going-out-of-business sales at the company’s 58 department stores and three specialty apparel stores in six western states are expected to begin around April 3.
A joint venture of liquidators won the auction for the assets of the Fresno, California-based chain, which filed for bankruptcy protection in January. The auction is subject to bankruptcy court approval.
Liquidation sales in the current environment of lower consumer spending are not unusual. In November, Circuit City Stores became the highest-profile retailer to file for bankruptcy during the recession and liquidated its assets after failing to find a buyer.
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Gottschalks filed for Chapter 11 bankruptcy protection on Wednesday after a tough holiday season. The company said it would pursue options including the possible sale of the company.
For those of you wondering “Got who?” — Gottschalks is a chain with 61 stores, most of them in California. Gottschalks said it had negotiated $125 million in debtor-in-possession financing from a group of lenders led by GE Capital.
Gottschalks was not alone. Goody’s LLC, a privately held clothing retailer that emerged from bankruptcy in October, filed for Chapter 11 protection again and said it plans to liquidate its remaining 282 stores.
Goody’s said it had investigated a number of alternatives, and ultimately concluded that the best way to maximize value for creditors was to conduct an orderly liquidation.
Gottschalks and Goody’s join KB Toys (shown here), Circuit City and other retailers who have filed for bankruptcy protection recently as consumers cut back on purchases amid the recession.
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