Home Front

A blog about the economy and the Sacramento-area real estate market.

March 31, 2009
Gottschalks: Going, going, gone

     We might never know exactly what happened in that closed-door auction for Gottschalks in Wilmington, Del., Monday. My hunch is, it wasn't much of a fight. A group of four liquidators, who had already been designated lead bidders, won the auction and will likely begin the going-out-of-business sale as early as Thursday.

    The lead bidders tend to win these bankruptcy auctions, so the outcome in Wilmington wasn't a big surprise. The other bidders were another liquidating group and a Chinese merchant, Shandong Commecial Group; Shandong was the only bidder of the three that was planning to keep Gottschalks open.

     The story broke late Monday and only made it into some home-delivered papers in Sacramento this morning. Here's the story Tim Sheehan wrote for this morning's Fresno Bee.

  We're working on our own story for Wednesday's Sacramento Bee, examining the economic implications. Here's a sneak preview: The implications are bad.

     Joe Penbera, a Fresno economist who's Gottschalks' lead director,told me that with the "multiplier effect," Gottschalks' 5,000 jobs really have an economic impact of up to 15,000 jobs. So losing Gottschalks is like losing a decent-sized Central Valley town, he said.

 

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