Alaska stores pose challenges for Gottschalks Inc.

Posted: Tuesday, May 30, 2000

ANCHORAGE (AP) -- Officials with Gottschalks Inc. acknowledge they will have to make some adjustments as the company moves into the Alaska retail landscape.

Gottschalks is a department store chain based in Fresno, Calif., the heart of the hot San Joaquin Valley, where shorts and a T-shirt can be worn nine months of the year.

''It's a very unique situation because we now have to meet the needs of a different climate,'' said Jim Famalette, Gottschalks' president and chief executive.

Earlier this month Gottschalks paid $20.1 million for the bankrupt Lamonts Apparel chain, taking over seven stores in Alaska and 30 others in Washington, Oregon, Idaho and Utah. Lamonts plans to run the stores until July, with Gottschalks hoping to reopen them under its own banner in late summer.

Famalette said he's looking forward to the challenge of changing the retail landscape from Fairbanks to Juneau, offering Alaskans a new department store that he says falls between a J.C. Penney and Nordstrom.

Spokesmen at Nordstrom and J.C. Penney said they welcome the competition.

''Whenever you get more competition in town, it's good because it keeps people shopping in the state instead of going off to Seattle,'' said Jim Knight, general manager of J.C. Penney in downtown Anchorage.

This summer, Gottschalks plans to remodel Lamonts stores in the Dimond Center mall in Anchorage and The Shopper's Forum mall in Fairbanks. Gottschalks is considering whether to refurbish more stores next year.

Retail analyst Harry Gaykian said Alaskans can expect to find stores more upscale than Lamonts, perhaps even comparable to Macy's. Besides clothing, Gottschalks stocks cosmetics and housewares.

''Gottschalks has a very good reputation,'' said Gaykian, a senior vice president at Salomon Smith Barney Inc. in Fresno who has followed Gottschalks stock for more than a decade. ''They're very community minded and do a lot of community sponsorship.''

Lamonts teetered on the verge of bankruptcy for five years until Gottschalks bought the troubled chain May 16.

Gottschalks' has been on a growth drive since Famalette joined the company in 1997. The retailer bought a small Southern California department store chain in 1998.

Sales have grown by more than $100 million in the past three years.

Famalette hopes the Lamonts acquisition will help double his company's sales, from $568 million in 1999 to $1 billion by 2004.

Famalette says Gottschalks sells more brand merchandise than J.C. Penney and Sears, but is more ''value-driven'' than Nordstrom.

Its racks are stocked with brands like Liz Claiborne, Carole Little, Alfred Dunner, Levi's, Dockers, Tommy Hilfiger, Nautica, Calvin Klein, Chaps and Polo Ralph Lauren.

Emil's Market, the company's housewares department named after Gottschalks founder Emil Gottschalk, is filled with products from Farberware, Krups, KitchenAid, Calphalon, Circulon and Cuisinart.

Gottschalks also sells bed and bath merchandise.

The Alaska stores will carry all or most of these products, Famalette said. But some might have more of one brand or product than other stores.

''The advantage of being a small department store is that we don't have to have a cookie-cutter approach,'' he said. ''We can let the community tell us what they want.''

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