Macy’s, Forever 21 purchases of Gottschalks sites approved
Afederal bankruptcy court judge has approved plans by Macy’s and Forever 21 to buy 15 sites of bankrupt retailer Gottschalks, according to a report published Wednesday in The Fresno Bee.
Macy’s and specialty retailer Forever 21 were the prevailing bidders in a May 28 auction for unexpired shopping center leases and real estate owned by Gottschalks. But the deals could not be finalized without the court’s approval.
Gottschalks CEO James Famalette confirmed Wednesday that the judge OK’d the deals, which will now give Gottschalks millions of dollars to help repay creditors.
The 15 sites to be purchased are in California, Washington and Alaska.
Macy’s is putting up an estimated $2.2 million, in its bid and other expenses, to take over Gottschalks’ leases in the Fresno area. Forever 21’s bid and other costs to take over 13 stores are valued at almost $17.2 million, court records show.
The sales could close by this week, according to court documents. It’s unclear when Forever 21 or Macy’s would open in any of the locations, because liquidators are still holding going-out-of-business sales at most of Gottschalks’ 58 stores to clear out merchandise, fixtures and equipment. Those sales are supposed to be completed by mid-July.
Jim Sluzewski, Macy’s senior VP for corporate communications, said store size and the age of the building are among the factors the company considered in making its bids for stores in Fresno and nearby Visalia, Calif.
When Gottschalks filed for bankruptcy in mid-January, it operated 58 department stores and three specialty stores in the western U.S. But most of the stores, as well as Gottschalks’ corporate headquarters in north Fresno and its distribution center in Madera, attracted no bids in the May 28 auction, leaving unclear what will happen to the properties.
Survey reveals theft still a top concern for retailers
WASHINGTON According to NRF’s fifth annual Organized Retail Crime survey, nine out of ten retailers (92%) report that their companies were victims of organized retail crime during the past year, up 8% from 2008. Nearly three-fourths (73%) of retailers also reported the level of organized retail crime activity has increased over the past 12 months, an increase of 11% from 2008.
“The unfortunate economic events of the past year have played an intricate role in how criminals continue to rip off the retail industry,” said Joe LaRocca, NRF senior asset protection advisor. “Organized retail crime rings have realized that tough economic times present new business opportunities by stealing valuable items from retailers and turning around to sell the merchandise to consumers looking for bargains.”
Even with the economy forcing retailers to cut staff and do more with less, 42% of retailers say their company is allocating additional resources to address organized retail crime. According to the survey, the average retailer spends approximately $215,000 annually just on labor costs to fight organized retail crime. Some retailers surveyed spend far more, with 6% of respondents spending more than $1 million dollars a year to employ loss prevention executives devoted to organized retail crime.
Thanks to the new partnerships formed with Federal and local law enforcement officials, retailers have had some success identifying stolen merchandise or gift cards at physical fence locations such as pawn shops and temporary stores (60%) and through online e-fencing operations (60%), where stolen merchandise is sold through online auction sites.
When asked how they would rank organized retail crime as a threat to their company, nearly one-third (29%) of retailers gave organized retail crime a “four” or “five” rating, identifying the problem as severe or significant. On average, retailers gave organized retail crime a rating of 2.87 on a five-point scale.
Toys’R’Us sees increase in 1Q operating earnings
WAYNE, N.J. Toys”R”Us reported that operating earnings for first quarter of fiscal 2009 increased to $21 million from $2 million for the first quarter of fiscal 2008. The net loss was $35 million, compared to $36 million for the first quarter of fiscal 2008.
“Our first quarter results speak to the strengths of our business strategy and reflect our discipline as an organization in delivering results, protecting margin, and rigorously controlling expenses,” said Jerry Storch, chairman and CEO of Toys“R”Us.
Net sales during the first quarter of fiscal 2009 were $2.477 billion versus $2.719 billion for fiscal 2008.