Gottschalks shoppers seek liquidation deals: Discounts expected to increase as stores begin closeout sales.

A steady trickle of customers looking for bargains streamed Friday into the Gottschalks at Manchester Center in Fresno. The discounts were mostly between 10% and 30% -- with steeper discounts to come.

Florine Mcneal of Fresno was hoping for a few deals but walked out with only a hooded sweatshirt that already was on the clearance rack before the liquidation.

"I'll come back and check," she said, echoing the sentiment of many customers Friday. "The prices are too high."

Liquidation is the final step in a Chapter 11 bankruptcy in which Gottschalks had hoped to be purchased by a company willing to keep the stores open. A Chinese company tried but it could not finalize a deal in time. Instead, a judge approved the highest bid made by liquidators late Monday.

A consortium of liquidators -- including SB Capital Group of New York, Tiger Capital Group of Boston, Great American Group of Los Angeles and Hudson Capital Partners of Newton, Mass. -- will handle the Gottschalks liquidation.

It will last at least 10 weeks. Gottschalks is required to leave the sites by July 15.

Gottschalks will accept returns of items for refunds until April 16 if they were purchased before Thursday and if customers have a receipt, according to court documents. The only exception is if the customer is making the return only to repurchase the product at a discounted liquidation price.

If you buy something now, however, it can't be returned.

"All sales of merchandise will be 'final sales' and 'as is,' " according to the order signed Wednesday by U.S. District Bankruptcy Court Judge Kevin Carey.

For now, at least, the liquidators will accept Gottschalks gift cards and gift certificates, as well as any merchandise credits issued by the retailer before the going-out-of-business sale began.

Typically retailers accept gift cards for the first part of a liquidation, but not always until the last day, as happened with Circuit City, said Scott Carpenter, an executive vice president with Great American Group.

Experts urge customers to use their gift cards as quickly as possible. Court documents say the liquidators will accept gift cards until they are told not to.

How fast prices fall depends upon on how much merchandise and time are left, Carpenter said.

"It's certainly true that the higher discounts are at the end of the sale," he said.

Several customers Friday walked out empty-handed, saying they might check back.

"Some stuff looked like it had been marked up," said Kim Sawtell of Fresno.

Accusations of raising prices often accompany liquidations. But it's a misconception, Carpenter said. Retailers typically rotate certain sales -- called loss leaders -- to bring customers into the store, changing what's on sale each week, he said.

Customers may see an item on sale one week that is not on sale when the liquidation starts because the sale ended, Carpenter said. That means the KitchenAid mixer that was 40% off as part of the retailer's sale may only be 10% off as part of the liquidator's sale, for example.

"These are bankruptcy proceedings," he said. "The attorney generals in all of the states are involved. There's no way a company like ours could ever walk in and raise prices."

Gottschalks employees will continue to work at the stores, led by liquidators at each site.

Some management-level employees may be offered financial incentives to continue working until the end, Carpenter said.

Sometimes merchandise is brought into the stores to help them make money, although Carpenter said he didn't know yet whether that would happen with Gottschalks.

Eventually, everything -- from the clothing racks to telephone system and forklifts -- needs to be sold, he said.

Longtime Gottschalks shopper Lois Carroll, 83, of Fresno visited the store for likely the last time Friday.

"It's kind of like a void in your life," she said, noting that almost all the clothes in her closet are petite sizes purchased at Gottschalks.

She said she probably won't come back for steeper discounts: "They've got me pretty well stocked."

Bee staff writer Tim Sheehan contributed to this report. The reporter can be reached at bclough@fresnobee.com or (559) 441-6431.

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