Gottschalks to focus on new program after considering strategic alternatives

By Lisa Kerner

Charlotte, N.C., Aug. 30 - Gottschalks Inc. said following the conclusion of its strategic review process, the company decided to continue pursuing its own long-term growth strategy to maximize shareholder value.

Gottschalks' committee and board of directors will "focus on a revised business plan that was developed as part of the strategic alternatives review process to increase sales, improve operating performance and position Gottschalks for long-term growth," a company news release stated.

The new plan, known as the Value Improvement Program (V.I.P.), was developed with Financo Inc. and includes a stepped-up new store opening schedule, changes to the company's marketing programs, enhancements to information technology systems and a plan for Gottschalks' owned real estate.

In addition, Gottschalks signed a commitment letter for an amended five-year financing agreement with GE Commercial Finance Corporate Lending for a $200 million facility in support of the V.I.P.

Gottschalks said it is also evaluating authorization of a share repurchase program that could begin in the current quarter.

The Fresno, Calif., regional department store chain announced in November that its special strategic committee comprised of independent directors would review alternatives. These alternatives included a revised business plan, operating partnerships, joint ventures, strategic alliances, share repurchases, a recapitalization, and the sale or merger of Gottschalks. UBS Investment Bank was retained to assist in the process.

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