Monday, April 26, 2010

Gottschalks: A department store reborn?

UPDATE: Retailing 2015: New frontiers is a good PDF from PricewaterhouseCoopers and TNS Retail Forward discussing key trends impacting the future of retail. The bigger issue is that brick-and-mortar retail is full of challenges.

I first read about the relaunching of Gottschalks via twitter...thanks, CBS 47. This could be interesting. The downfall of this once publicly traded company is still impacting the economy as many of the former Gottschalks employees are counted among the region's unemployed.

Can it come back? Conlan, local twitter stud, suggested relaunching in downtown Fresno. This seems like a good idea (on the surface). Here are my three reasons:

1) Public Relations
They have roots in downtown Fresno and can be seen as part of the revitalization effort. Spin control? Maybe. But I think it is also a good opportunity to lead by example.

2) Affordable
Plenty of good retail space available, incentives and a growing amount of foot traffic.

3) Urban Vibe
Well, if "It's a G Thing" didn't work, then maybe LL Cool J is available to do a little "Don't Call it a Comeback" this time around.

I really want to see this work. God knows we could use the jobs. I will follow with cautious curiosity.

What happens to the debts of the original BK?
How forgiving will the former customer be?
How much money will it take to build brand loyalty?
Is the past leadership the right leadership for this new venture?
Will they finally have an online presence?

Maybe Gottschalks is the "silver bullet" that will save downtown Fresno (I kid, I kid).


  1. I suspect that the corporate entity known Gottschalks Inc is still dead and not likely to return to life. But the "Gottschalks" brand name/logo is still a somewhat valuable bit of intellectual property. If Levy's new venture acquires the brand name from the now defunct Gottschalks Inc, and applies it to his new "Gottschalks by Joe Levy" company, it would make a lot of sense. Lots of brand equity in that name.

    Compare it to the situation with General Motors. The "old GM" (General Motors Corporation) still exists in bankruptcy. But the brand names and all of the intellectual property (and all other important assets) were transfered to a "new GM" which is now technically known as "General Motors Company." But General Motors Corporation and General Motors Company are entirely separate. One is still bankruptcy, and the other is majority owned by the US Treasury.

    Likewise, after the "old" CompUSA went into bankruptcy and closed its brick and mortar stores, a new investor group purchased the CompUSA name and logo, and is now using it online, and I think in a few remaining brick and mortar stores.

    All that said, I think this move is very interesting, less so for what it says about Gottschalks, but more for what it might say about confidence in the local economy. But the big question remains - can a small, locally owned retail dept store chain exist in today's retail world.

  2. Good points. I think there is a big risk because of the limited reach of the brand's equity. Local equity, but local pain caused.

    Your closing point about the feasibility of small retail is a good point to ponder. Limited buying power, limited audience (even if online), limited resource to expand the brand.

  3. In any case, I think the company has to take a very humble approach if it hopes to build good will. A giant "Under new management" sign would be a good start, although it sounds like a lot of the previous employees would be coming back. I'm also cautiously curious (whatever that means). I'd like to see a Fresno tradition continue, but they better higher a good PR company.

  4. I watched that whole video and figured out why Downtown has failed... No more puppet shows.

  5. Color me skeptical, but I don't give this much of a chance:

    1. Levy's trying to tie to the former brand, but simply removing the "s" not only causes confusion, it's annoying. Adding "by Joe Levy" is just being ridiculous.

    2. He's starting in Clovis. Got another hand he can slap Fresno with?

    3. Even when the economy was riding high, Gottschalks wasn't very competitive (at least as I perceived it). And there was hardly an online presence - I'm a little biased here, but a retailer of any significance should serve customers online.

    4. It's a department store. I'm sure people still walk into those to shop, I'm just not sure who.

    I can only hope he'll slap one of those "Buy Local" stickers in the windows.