Gottschalks Completes Sale of Palmdale, California Store to Forest City Enterprises

Company Expects to Record Pre-Tax Gain of Approximately $8.7 Million 


FRESNO, Calif., Sept. 8  /PRNewswire-FirstCall/ -- Gottschalks Inc. (NYSE:GOT) today announced that the Company completed the sale of its wholly-owned store in the Antelope Valley Mall in Palmdale, California, to Forest City Enterprises, the owner of the shopping center on September 5, 2008.  Gottschalks plans to use proceeds from the $12 million sale of the Palmdale store to pay down debt and increase availability in the Company's credit facility.  The Company expects to record a pre-tax gain of approximately $8.7 million in the third quarter of 2008 as a result of the sale.

Jim Famalette, Chairman and Chief Executive Officer of Gottschalks, stated, "We are pleased to have completed the sale of one of two stores we operate in Palmdale.  We continue to focus on better managing our real estate to maximize shareholder value.  This transaction allows us to streamline our operations while also reducing our debt."

As previously announced, Gottschalks expects to close its 105,000-square-foot wholly-owned store and consolidate its two stores into its second 92,000-square-foot location in the first half of 2009.  During the transition period, the Company will lease both stores.

About Gottschalks

Gottschalks is a regional department store chain, currently operating 58 department stores and three specialty apparel stores in six western states, including California (38), Washington (7), Alaska (5), Oregon (4), Nevada (2), and Idaho (2).  Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise.  Gottschalks offers corporate information and selected merchandise on its website located at http://www.gottschalks.com/. 

DATASOURCE: Gottschalks Inc.



CONTACT:  Gregory Ambro, Executive Vice President, Chief Operating

Officer of Gottschalks Inc., [phone]; or Leigh Parrish,

[phone], or Stephanie Rich, [phone], both of Financial

Dynamics, for Gottschalks Inc.



Web site:  http://www.gottschalks.com/ 

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