Clovis News

Gottschalks a big loss for smaller cities

The shock waves from Gottschalks' bankruptcy are rippling far beyond the Fresno-based retailer's home in the San Joaquin Valley.

From Alaska to Southern California, in communities where Gottschalks was one of the few -- if not only -- department stores, officials are lamenting lost jobs, lost sales-tax revenue and lost shopping opportunities.

The company, with 58 department stores and three specialty stores, filed for bankruptcy in mid-January. Going-out-of-business sales began last week and stores will be empty by July.

Gottschalks' departure from Oakhurst leaves Madera County with no traditional department store and the mountain community with a paucity of shopping options, said Kathy Corry, executive director of the Oakhurst Area Chamber of Commerce.

Corry said the store was among Oakhurst's largest generators of sales tax. "We're hoping smaller mom-and-pops will come in and pick up the slack," she said.

Madera County Supervisor Tom Wheeler said he hopes another retailer steps in to fill the void because the town's large retiree population doesn't like driving to Fresno or Madera.

"We're trying to keep people local for our tax base," Wheeler said.

In some cities, Gottschalks' loss after the demise of Mervyns, Circuit City and others is a concern even though there are other retail options.

In Chico, where 42% of the budget comes from sales tax revenue, Mervyns and Gottschalks were both among the top 25 sales tax generators, said Finance Director Jennifer Hennessy.

"We're pretty sales-tax dependent," she said, adding that Chico has no major rival shopping areas within an hour's drive. "If we have leakage to Roseville or Redding, then we'll experience sales-tax loss. We hope they would go to Kohl's, J.C. Penney or Sears" locally.

Fresno's abundance of shopping choices means customers likely will shift to other retailers, but the real hurt comes from job losses, city spokesman Randy Reed said.

About 260 people lost their jobs Friday at the corporate headquarters in Fresno. Another 400 full- and part-time workers are at the company's four stores in Fresno and Clovis, and about 105 people eventually will lose their jobs at Gottschalks' distribution center in Madera.

Mervyns and Gottschalks accounted for 2% of Clovis' sales tax revenue -- about equal to the salaries of three police officers, City Manager Kathy Millison said.

But the loss of two anchors at Clovis' only mall isn't good, she added. It may reduce traffic and hurt other retailers inside the shopping center.

"It makes it less desirable to shop in Clovis," Millison said. "We want some type of department-store use."

In some cities, Gottschalks lures people to spend at other nearby stores, too. The store is "a regional draw [that] brings people to San Luis Obispo," said Dave Garth, CEO of that city's Chamber of Commerce.

The exit of Gottschalks leaves Sears as San Luis Obispo's only department store. Kohl's is expected to open in a former Mervyn's building.

Indio, in Southern California, has a Wal-Mart and a Target, but nothing akin to Gottschalks, said Susie Harvey, interim CEO of the local Chamber of Commerce. "This particular business filled a certain niche."

Where Gottschalks had stores in the Pacific Northwest, options are far more limited.

"When we see stores closing, it's very concerning to us," said Larry Semmons, city manager for Soldotna, Alaska, a city of about 4,000 people southwest of Anchorage.

Gottschalks has been Soldotna's only department store and among its chief retail sales-tax producers, "but exactly what the loss will be is difficult to determine," Semmons said.

Semmons expects some Gottschalks shoppers -- and their shopping dollars -- will migrate to Anchorage, about 150 miles away, for clothing and other merchandise that won't be available locally.

For Port Angeles, Wash., Gottschalks' departure "is going to leave a large hole in our downtown," City Manager Kent Myers said. "There's nothing else here that compares to what Gottschalks offered."

Myers said Gottschalks has accounted for between $45,000 and $50,000 a year in sales taxes, in addition to utility fees and other assessments, in the city of about 20,000.

But, he added, "we can't lose sight of the 40-50 people there who are not going to have a job."

It's not sales tax, but sales leakage that concerns local officials in Idaho, where sales taxes are collected by the state and redistributed to cities based on population formulas.

But in Pocatello, the only major clothiers after Gottschalks departs will be J.C. Penney and Ross Dress for Less. Another department store, Dillards, closed about a year ago in neighboring Chubbuck.

Pocatello officials fear customers may head two or more hours south into Utah, to either Ogden or Salt Lake City, for major shopping trips.

"The major effect of Gottschalks here is on jobs and on the availability of clothing in this small town," said David Swindell, the chief financial officer for the city of 55,000.

"Frankly, where else can you buy a men's suit in this town? Where can women buy their cosmetics? Now that's gone."

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