Valley Mall store among 55 Gottschalks that will shut down

UNION GAP, Wash. -- The Valley Mall will be losing one of its major tenants in the coming months.

Gottschalks announced Tuesday that it's closing its department stores and expects to begin liquidation sales as early as this week. It employs 32 people at the mall in Union Gap.

The closure was a surprise to customers such as Kathryn Hinkley, a 75-year-old Yakima resident, who was browsing there Tuesday afternoon.

Hinkley said she shopped at the store weekly for clothes and other merchandise.

"I think it's terrible," she said. "I love Gottschalks. I can find the merchandise easier here."

The store is one of the Valley Mall's three major anchors, along with Sears and Macy's.

Liquidation of the store's merchandise is expected to be finished by July 15. A separate auction of Gottschalks' real estate assets will occur in the next few months.

If the store's Union Gap lease isn't sold in liquidation, work will begin to tailor the property for a potential department store, said Fred Bruning, president of Portland-based CenterCal Properties, which owns the mall.

He would not officially confirm any names but gave a hint.

"One of my personal goals was to bring a J.C. Penney back to the Valley," he said. "I would say that's my sentimental favorite."

Founded in 1904, Gottschalks runs 55 department stores and three specialty apparel stores in California, Washington, Alaska, Oregon, Nevada and Idaho. It has 5,200 employees.

It has operated in Union Gap since 2000, when it purchased Lamonts, a Kirkland, Wash.-based retailer that went bankrupt. As part of the purchase, it acquired 38 Lamonts stores in Washington, Oregon, Idaho, Alaska and Utah.

Less than a decade later, Gottschalks found themselves in a similar position to the now-defunct Lamonts. It filed for Chapter 11 bankruptcy protection in January with $288 million in assets and $197 million in debts, according to the bankruptcy filling.

It closed several stores in Washington state in 2003 but has continued to operate in Union Gap and six other locations: Spokane, Marysville, Moses Lake, Port Angeles, Lakewood and Walla Walla.

But the retailer was never able to find a viable concept. Gottschalks states it offers "moderate" brand-name items. But as discount retailers such as Wal-Mart and Target developed over the years, Gottschalks likely lost much of its budget-conscious shopper base, said Mary Ann Odegaard, director of the retail management program at the University of Washington.

"The strong players emerge and the weaker ones wash out," she said.

Among those interviewed at the Valley Mall on Tuesday was Donna Gomez, a 40-year-old Naches resident. She said she's never bought anything at Gottschalks. She said her children like Macy's better and she prefers stores such as Shopko and Fred Meyer, where she finds less-expensive merchandise.

"I got in there once in a while to look, but I don't buy anything," she said.

But Donny Sharp, a 15-year-old Yakima student, often shopped there for his school clothes every year.

"It always had the best prices," he said.

* Mai Hoang can be reached at 577-7685 or mhoang@yakimaherald.com.