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Through a court-approved auction slated for March 17 or thereabouts, the company will be liquidated or will continue in some form with a new owner.
The Fresno-based department store chain, which filed for bankruptcy Wednesday, is negotiating in earnest with an unnamed buyer, court documents show. That buyer will put in a bid by March 2 to kick off the auction process.
The Wall Street Journal identified the buyer as El Corte Ingles SA, a Spanish retailer. The story cited two anonymous industry insiders.
Gottschalks and El Corte have a decade-long relationship through a name you're more likely to recognize: The Harris Co. Back in 1998, when Gottschalks bought the smaller Harris chain, it was really dealing with El Corte, which had picked up Harris in the early 1980s.
You know Harris. One of the nine stores sold in '98 was the now-empty location in East Hills Mall.
The Harris name is still used for some of El Corte's American operations, including the company's ongoing stake in Gottschalks.
Harris is the No. 1 unsecured creditor in Gottschalks' bankruptcy, owed more than $16 million. The debt is what's left of a $22 million note Gottschalks used to buy Harris a decade ago.
Harris also owns about 15 percent of Gottschalks' common stock through 2 million-plus shares picked up in the 1998 deal.
What's more, two of Gottschalks' 11-member board of directors, Tom McPeters and Jorge Pont Sanchez, are Harris guys. Pont Sanchez is Harris' chief executive and a division director of El Corte; McPeters is Harris' chief financial officer.
What does this all mean if El Corte/Harris ends up as the successful bidder?
That's not clear yet.
It seems unlikely, from industry analyst comments, that El Corte/Harris or any other buyer would want to continue running Gottschalks in its current form.
The two Gottschalks stores in Bakersfield, at East Hills and Valley Plaza, have different profiles.
Gottschalks owns the land, but not the building, at the East Hills site. (El Corte owns the empty Harris building, which Gottschalks vacated last spring.) It leases the Valley Plaza site, as it does most of its stores.
Property owned by Gottschalks is slated for a potentially different path than the leased stores, court papers show, depending how the complex sale unfolds.
A Gottschalks spokeswoman said Friday the company couldn't comment about the fate of individual pieces of property.
McPeters, the Gottschalks board member and Harris officer, did not return a message left Friday afternoon seeking comment.
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