Chain bids on Lamonts, plans to change name

Store may shut down temporarily in July during transition

Posted: Tuesday, April 25, 2000

Managers of the Nugget Mall said today they can't be certain what to make of the proposed sale of Lamonts Apparel Inc. stores to a Fresno, Calif.,-based department store chain.

But representatives of Lamonts and Gottschalks Inc., whose acquisition proposal is pending with the U.S. Bankruptcy Court, gave no indication the Nugget Mall retail site would go dark, except perhaps for a transitional period.

Lamonts spokeswoman Rivian Bell said there could be a temporary closure of the Nugget Mall store in late July, as the transition occurs. The Lamonts name will be discontinued, she said.

Gottschalks -- which operates 42 department stores and 20 specialty apparel stores in California, Washington, Oregon and Nevada -- was founded in 1904 and is the largest independently owned department store chain based in California, with annual sales of about $568 million.

Gottschalks' $19 million offer is for leases, fixtures and equipment of all 38 Lamonts stores, including seven in Alaska. The company was not required to bid on every store, suggesting that it intends to continue operating them all.

Lamonts is standing by its corporate policy of not discussing the economic performance of specific stores. A Gottschalks official also would not talk about the future of the Nugget Mall operation.

``We're not commenting on individual market areas,'' said Michael S. Geele, senior vice president and chief financial officer of Gottschalks. ``If and when we get bankruptcy court approval, we'll have a lot more to say at that time.''

Other bidders could come forward by the May 15 hearing date on the proposed sale.

In anticipation of a new owner, Lamonts will liquidate its inventory over a 10-week period, possibly starting as soon as May 10.

On Jan. 4, Lamonts filed for reorganization under Chapter 11 of the federal bankruptcy code, citing Y2K expenses, a lack of capital and poor sales due to cool summer weather in the Pacific Northwest in 1999. Lamonts was founded in 1967.

It was the company's second such filing within five years, creating uncertainty at the Nugget Mall, which had already lost an anchor tenant with the departure of Rite Aid in 1998.

Ted Tollefson, co-owner of the Bellevue, Wash., firm that manages the Nugget Mall, said it's too soon to know whether Gottschalks, which he hadn't heard of previously, really intends to keep all the stores open.

``It sounds on the face of it like a good happening,'' Tollefson said from Bellevue this morning.

In Juneau, Nugget Mall site manager Bud Jaeger said he only knows what he's heard in the news.

``I think it's good,'' Jaeger said. ``Hopefully, it'll allow them to go on.''

Lamonts spokeswoman Bell said she can't speak for Gottschalks, but said the evidence would indicate they want to operate the stores.

``Gottschalks is buying the leases because they see value in them,'' she said. ``So the intent is to operate the stores. . . . I think for customers it's a win in a lot of respects.''

Gottschalks is ``a good retailer with a strong financial foundation,'' and it has twice the Lamonts inventory, Bell said.

Bell said Gottschalks will offer employment to ``substantially'' all of Lamonts store staff, about 1,400 people. Corporate staff in Kirkland, Wash., 115 people, could be unemployed as soon as June 24.

Gottschalks has not yet made any statement about employment levels.

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