Gottschalks Brushes Off Chapter 11 Speculation, WSJ Reports

Macy's to close 11 stores, 'selectively' open new ones

Fresno-based Gottschalks Department Stores has brushed aside suggestions that they will soon be filing a Chapter 11 bankruptcy reorganization the Wall Street Journal reports today.

According to the report, the department store operator is seeking funding from the Chinese investment group Everbright Development Overseas Ltd. to avoid a trip to the bankruptcy court. In November, Gottschalks and Everbright had reached terms on an agreement that would have injected as much as $30 million in the battered company in exchange for a 75% stake in the company.

That agreement expired and reportedly Gottschalks is re-negotiating with Everbright. The same story reports that in addition to Gottschalks, several other regional retailers are teetering following a historically weak holiday shopping season.

Gottschalks operates one store in Elk Grove on Elk Grove Blvd. adjacent to Wal-Mart.

In other retailer news, Macy's said it plans to closed 11 under-performing stores. Macy's executives said they would continue to "selectively" open new stores.

Chicago-based General Growth Properties, developer of the unfinished The Elk Grove Promenade mall had expected to have Macy's as an anchor tenant. The status of Macy's future plans at the Elk Grove Promenade are unclear.