Gottschalks Is Liquidating

Another chain is going out of business.

Gottschalks, which filed for bankruptcy at the beginning of the year, can no longer hold on, and is closing all 58 of its stores, which are located on the West Coast.

So now there is more product out there to absorb.

It seems like there was some success in filling spaces once occupied by Mervyns after Forever 21 and Kohl’s bought 46 stores last year from that regional chain. But we’re assuming that we are less likely to see a lot of these situations coming up with Gottschalks. Or are there West Coast versions of regional, expanding retailers, like Raymour & Flanigan that can pick up some of this slack?

8 Responses to “Gottschalks Is Liquidating”

  1. 1 E March 31, 2009 at 8:38 am

    Raymour & Flannigan is taking over some Linens ‘n Things locations, and they should cool it. The markets (stock/retail) still don’t know what to make of themselves. Trying to project quarterlies/market demand at this point is next to impossible, and R&F is buying not market-share, but location-share. Not the same thing.

    When will it level off? Don’t know. R&F sounds healthy and should status quo it for now — they don’t have to contract, but expanding in a falling market (even with lease “deals”)isn’t as advatageous as it looks-sounds. They’re walking themselves into a discounted mine-field they’ll have one hell of a time trying to extricate themselves from in 6 months-1 year, tops.

  2. 2 Alex April 1, 2009 at 9:19 am

    any kind of discount retailer (Forever 21, Kohl’s) are great examples of stores that can take these spaces. The market needs cheaper stores to take these spaces – those stores will do well – the other ones will struggle. there was a good article recently on how americans are less reluctant to pay full price now for clothes – they’ve been getting things on sale for the past few months and love it – why pay retail!?

  3. 3 Peter D. Morris SCSM, SCMD, CLS April 1, 2009 at 9:46 am

    There are several options for this space to be remerchandised:

    1. the existing rent is low. The landlord doesn’t need a huge rent uptick to benefit from the downtime,
    2. the existing rent is low which means the landlord doesn’t need to backfill with a retailer. Think other uses.
    3. the land mass has poor density. Is it better to demo and convert the use. Think other uses.

    Linear thinking will not win the day today – as demonstrated by Forever 21 looking at space 4X their past prototypical when taking over Mervyn’s space.

  4. 4 John Fox April 2, 2009 at 9:04 am

    I think these spaces will prove very hard to fill with traditional retail. Many of the markets are remote and small. Others have challenging housing like the Central Valley of California. Owners are going to have to think out of the box or non-linear as the above posters suggests.

  5. 5 Bob April 2, 2009 at 9:17 am

    VERY selective possibilities i.e. Kohls in San Luis Obispo?

  6. 6 Ladislao April 2, 2009 at 9:58 am

    “Current Events Form Future Trends” (as Gerald Celente would say). This is just the beginning of many closings, and who is going to fill most of these empty spaces? Unfortunately, nobody… We’re going to have a ton of “ghost malls” pretty soon…

  7. 7 Tim from Atlanta April 3, 2009 at 8:26 am

    To add fuel to the fire, there is now a company that provides alerts when a Retailer’s named “Co-tenant” leaves a center. Everyone is capitalizing on this downturn.

  8. 8 Ken Miller April 3, 2009 at 7:12 pm

    Gottschalks was traditionally a small town retailer. Filling 60,000 – 70,000 sf in small towns when retailers are in retreat will prove difficult. We’re finding that churches and career colleges can sometimes be alternate uses for large vacant retail space.

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