Report: Gottschalks to Open Smaller Stores

Fresno, Calif. In response to declining revenue and profits, and to woo shoppers who have been lured away by discount stores, Gottschalks is launching a smaller-store strategy, according to an article in The Fresno Bee.

"In some ways, it's a re-engineering of the store," Jim Famalette, Gottschalks' CEO and board chairman, said in the article. The new stores will focus on the retailer’s top categories, including cosmetics, shoes and women's apparel, for example. These scaled-down locations will be rolled out to new regions where customers can't necessarily find those products.

The first store, located in Elk Grove, Calif., has produced strong sales since its November opening. Gottschalks' next new smaller store will open in Bend, Ore.

Other chains, such as department store chain J.C. Penney and electronics retailer Circuit City, are also riding this downsizing trend. The move is helping these chains adapt to their own declining mall traffic, as their shoppers also shift to discounters like Wal-Mart and Target.