Chinese retailer bids to keep bankrupt Gottschalks alive

<p>One of China’s largest retailers has submitted a last-minute offer to buy Gottschalks, the bankrupt department store chain that will be auctioned off Monday.</p><p>Shandong Commercial Group General Corp., a conglomerate owned by the Chinese government, is the only bidder that would keep Gottschalks stores open if its offer is accepted.</p><p>Two other bidders would liquidate the company’s assets, putting Gottschalks out of business.</p><p>The fate of the Fresno-based retailer will be decided Monday in U.S. District Bankruptcy Court in Delaware.</p><p>Founded in 1904, Gottschalks employs 5,200 people at 58 department stores across the West. In Santa Rosa, its store anchors the south side of Coddingtown Mall.</p><p>Shandong, one of China’s 20 largest retailers, faces an uphill battle to gain control of Gottschalks.</p><p>It must beat offers by two rival liquidating teams. One is led by Gordon Brothers Retail Partners, a Boston-based liquidator. The other is a joint venture made up of liquidators Great American Group LLC, SB Capital Group LLC, Tiger Capital Group LLC and Hudson Capital Partners LLC.</p><p>Earlier this month, the Great American team was granted lead bidder status. If successful in the auction, Shandong or Gordon Brothers would have to pay the Great American team a breakup fee of about $1 million.</p><p>If the Great American group wins the bidding, going-out-of business sales could begin around April 3 and end by July 15.</p><p>Although the auction’s rules give the Great American liquidators the inside track, the emergence of Shandong was a relief to Gottschalks officials, said Joseph Penbera, Gottschalks’ lead director.</p><p>“My concern has been about the jobs,” Penbera told the Sacramento Bee. “To see a company with all these people just ‘whoosh’ right out of the area would be really bad.”</p><p>In December, another Chinese company, Everbright Development Overseas Ltd., backed out of a tentative agreement to invest $30 million in Gottschalks. Gottschalks filed for Chapter 11 bankruptcy protection a month later.</p><p>The Sacramento Bee and Associated Press contributed to this story.</p>