PORT ANGELES — Gottschalks Inc. announced on Wednesday that it has filed for bankruptcy protection and is offering the company for sale — leaving the future of its Port Angeles location unknown.
The Chapter 11 filing with the U.S. Bankruptcy Court came after a $30 million investment from Everbright Overseas Securities Ltd. fell through because Gottschalks’ lenders reduced the company’s available credit, a Gottschalks written statement said.
“Persistent challenges in the economy and recent unexpected reductions to our borrowing capacity as a result of tightening credit markets left us with no other recourse,” said Jim Famalette, chairman and chief executive, in a separate statement.
Company to pursue sale
The statement said that the Fresno, Calif.-based company will pursue a sale of the business — which includes 59 department stores and three Village East specialty clothing stores in Washington state, California, Alaska, Oregon, Idaho and Nevada — or another transaction with a third-party investor approved by the bankruptcy court.
The Gottschalks at 200 W. First St. in Port Angeles has the reputation of being the highest producer per square foot of all the company’s stores in Washington state.
Ken Porter, manager for the Port Angeles store, said he could not comment on Wednesday.
An informational packet on the recent announcement is available at the store, he said.
Gottschalks’ Chapter 11 petition filed Wednesday said it has assets of $288.4 million and debts of $197.1 million, the Associated Press reported.
Gottschalks has negotiated a $125 million debtor-in-possession financing from a group of lenders led by GE Capital to pay for employee wages and benefits and other working capital requirements, the company said in a statement.
Gottschalks executives had no more comment on Wednesday.
Closure of the Port Angeles store would be a great loss to downtown, said Russ Veenema, Port Angeles Regional Chamber of Commerce executive director.
“They are a true department store,” he said. “We would be losing that department-store-type concept.”
The store would also become the sixth, and largest, store to close in downtown Port Angeles in the last three months.
The Camera Corner, McLean’s Shoes, Raven’s World, Zenzizi and Landing’s Restaurant & Dockside Lounge had closed their doors by the end of last year.
“It is something that will probably happen to more businesses in the future during these tough times when the community has to really, really come together to do the absolutely best we can to promote the community,” Veenema said.
Gottschalks’ Port Angeles location opened in 2000. It was one of 34 stores purchased from Seattle-based Lamonts Apparel Inc. for $22 million.
The store survived a series of Gottschalks closures in 2003 that involved five Washington locations.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
