Friday, February 20, 2009

Gottschalks Granted a Reprieve

Looks like Gottschalks is safe, at leat for now, due to a $125 million debtor-in-possession credit agreement (Johnson, 2009). The additional money will allow Gottschalks to continue operations during its reorganization process.

What we expect is store closures to boost Gottshalks' balance sheet. The real question is, which ones? Smaller stores are likely targets; even if profitable. Revenues from smaller stores typically aren't enough to keep a company Gottschalks' size afloat.

Stay tuned for more Gottschalks' information as it becomes available.


Johnson, K. (2009). Gottschalks gets court's OK on $125M credit line. Sacramento Business Journal. Retrieved from

Thursday, February 05, 2009

Taubman's Unethical Act in Walnut Creek

In an earlier post regarding the petition in Walnut Creek to stop Neiman Marcus from joining Broadway Plaza, the financial backer of the signature gathering effort has been revealed. Unsurprisingly, it's the Taubman Group... owner of nearby Sunvalley Mall in Concord.

According to Elisabeth Nardi, the reporter at the Contra Costa Times covering the issue, Taubman spent nearly $95,000 to fund the petition (Nardi, 2009).

Taubman filed a campaign statement with the city on the 2nd of February. The statement showed nearly $80,000 was paid to Al Abrams, a public relations consultant, who misrepresented himself to Walnut Creek residents by claiming to be a real estate journalist when trying to persuade residents to reject the project (Nardi 2009). The sticking point was the popular "parking issue" that Neiman Marcus would bring to downtown Walnut Creek.

The campaign statement went on to state Taubman's new reason for stopping the project was due to, "fundamental fairness" (Nardi). Taubman claims that it "wanted to make sure it was a level playing field for all local development interests and were concerned about a bad precedent being set by the special approvals Broadway Plaza received in Walnut Creek" (Nardi, ¶ 6).

Mayor Gary Skrel is optimistic about the project and has faith in Walnut Creek resident being "smart enough to know what is really going on" (Nardi, 2009, ¶ 9).

Taubman, possibly encouraged from the recent election that demonstrated out-of-state special interest groups can use the intiative process to determine California's future, is sending a powerful message to Walnut Creek residents. Simply said, Michigan-based Taubman, who has no business in Walnut Creek, has decided it has the moral authority to decide what Walnut Creek should do and believe. The recipe is simple. Add one part deception (misrepresentation), a heaping of fear ("parking will get worse!") and a liberal dose of secrecy to manipulate voters to seal the deal.

Unfortunately for Taubman, Californians are an educated bunch that ultimately learn the truth and do the right thing.


Nardi, E. (2009, February 02). Rival mall company financed campaign against Neiman Marcus. Contra Costa Times. Retrieved February 05, 2009 from:

Wednesday, February 04, 2009

Sacramento Landlords Picking Out Gottschalk's Casket

In another sign of its impending doom, landlords and commercial brokers in the Sacramento region are pondering the future of Gottschalk's sites. According to Kelly Johnson (2009) "Some landlords are already shopping their space to other retailers" (¶ 7). We'll know in a month if we hail them as smart or pity them as dumb. Gottschalk's has until mid-March to find a buyer or financing, or it's kaput for them.

Speaking of pity... the owner of Country Fair Mall in Woodland, Raymond Arjmand, "is convinced Gottschalks isn’t going anywhere" (Johnson, 2009, ¶7). I've got a pretty orange bridge for sale, too.

Last week, Macy's shed 1,400 jobs, which shows its not in any position to expand. What buyer would have the capital, credit, or gumption to buy Gottschalk's in time?

In the Sacramento metro, Gottschalk's has locations in Sacramento (Country Club Plaza Mall), Davis (University Mall), Woodland (Country Fair Mall), Elk Grove, and Auburn.

I'll miss the ole' store.


Johnson, K. (2009). Brokers consider future of local Gottschalks sites. Sacramento Business Journal. Retrieved February 04, 2009 from:^1770511&ana=e_vert

Outlet Malls Thriving in Bad Times

It seems as the economy continues to flounder, shoppers are heading to outlet malls in droves. In an analysis of foot traffic during Black Friday weekend 2009 compared to 2008, foot traffic at all U.S. retail establishments fell 19.3% while traffic at the outlet centers owned by Prime Retail was up 8.3% (Misonzhnik, 2009). Chelsea Property Group, owned by Simon Property Group, reported an net operating income (NOI) increase of 7.7% for its outlets in 2009 over 2008 (Misonzhnik).

Although shoppers, faced with a decline in discretionary income, are cutting back spending, many instead are turning to the better deals perceived to be offered by outlet stores.

The Bay Area has a number of outlet malls within a two hour drive, including the popular Gilroy Premium Outlets and Vacaville Premium Outlets, both owned by Chelsea Property Group. The Great Mall, with nearly 200 stores, is both convenient and loaded with bargains. Smaller outlet malls, like Napa Premium Outlets and Petaluma Village Premium Outlets, are still worth the drive.

Sacramento has the Folsom Premium Outlets, which is a personal favorite of mine. I'd swear people there won't buy long-sleeved shirts due to the long summers. For me, it's a bonanza of selection.

The Central Valley has the Tracy Outlets, but I'm no longer impressed with its selection.

Although the retail industry is suffering a serious downtown that continues unabated, the shining star for shoppers is the nearest outlet mall.

Misonzhnik, E. (2000), Room to Grow (1/29). Retail Traffic. Retrieved February 04, 2009 from: