GOTTSCHALKS INC. 
By
Total sales for the 13-week fiscal quarter decreased 14.2% to
Total sales for the 52-week fiscal 2007 decreased 8.1% to
Jim Famalette, chairman and chief executive officer of Gottschalks said, "As anticipated our sales results in January were negatively impacted by the weak economic environment. We continued to experience the greatest impact in our California locations, with our Northwest stores delivering better results for the month. Regarding our merchandise categories, coats, moderate sportswear and children's were our best performing categories while we experienced the softest sales in textiles and home furnishings. We deepened our promotions during the month to clear through seasonal merchandise, and that coupled with our ongoing focus on tight inventory management resulted in comparable store inventory 6.5% below the same period of the prior year at the end of the month. Our performance in January continued the trends we experienced throughout the fourth quarter as we faced a very challenging selling environment. As a result, we currently anticipate that we will report a marginal profit in the fourth quarter of fiscal 2007.
"We expect to see a continuation of the current retail environment into the early part of fiscal 2008 and, as a result, we are taking a conservative approach to managing our business in the near-term. We plan to continue to make progress on our Value Improvement Program launched in the second half of 2007, and look forward to the improvements in our business that we expect to benefit Gottschalks in fiscal 2008 as well as in the long term. We remain committed to long-term expansion of our top line and operating margin as well as maximizing shareholder value through projects focused on merchandising, technology and real estate."
About Gottschalks
Gottschalks is a regional department store chain, currently operating 59 department stores and 4 specialty apparel stores in six western states, including California (39), Washington (7), Alaska (5), Oregon (4), Nevada (2) and Idaho (2). Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. Gottschalks offers corporate information and selected merchandise on its website located at http://www.gottschalks.com.
Business Risks and Forward Looking Statements
This release contains forward-looking statements (within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. In some instances, such statements may be identified by the use of forward-looking terminology such as "may," "will," "expects," "believes," "intends," "projects," "forecasts," "plans," "estimates," "anticipates," "continues," "targets," or similar terms, variations of such terms or the negative of such terms. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements, including, without limitation, the Company's ability to meet debt obligations and adhere to the restrictions and covenants imposed under its various debt agreements; the timely receipt of merchandise and the Company's ability to obtain adequate trade credit from its key factors and vendors; risks arising from general economic and market conditions (including uncertainties arising from acts of terrorism or war); the ability to improve the profitability and cash flows of its stores or to sell, sublease or close underperforming stores; the ability to modify operations in order to minimize the adverse impact of rising costs, including but not limited to health care, workers' compensation, property and casualty insurance and utilities costs; the effects of seasonality and weather conditions, changing consumer trends and preferences, competition, consumer credit, the Company's dependence on its key personnel and general labor conditions, all of which are described in more detail in Gottschalks' Annual Report on Form 10-K and other reports filed by Gottschalks with the Securities and Exchange Commission. GOTTSCHALKS PRESENTLY DOES NOT INTEND TO UPDATE THESE STATEMENTS AND UNDERTAKES NO DUTY TO ANY PERSON TO EFFECT ANY SUCH UPDATE UNDER ANY CIRCUMSTANCES.
SOURCE Gottschalks Inc.
