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Author: kstoltz Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 6  
Subject: GOT has potential Date: 10/6/2000 2:30 PM
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Hopefully, there's a couple of folks out there looking at this board who are interested in the company!

I think Gottschalk's has a great upside potential, and is a good fast grower candidate within the retail space. First of all, I've shopped there on several occassions as have many of my family and friends, and everyone likes the store immensely. Gottschalk's is a regional department store based out of Fresno, and has several stores in California, Washington, Oregon, Nevada, Alaska, and Utah. It sells quality name brand clothing, and usually is located away from metropolitan areas. I would liken it to a Walmart approach in that sense. The stores are very well kept, and the staff is friendly.

For where I live (CA), this seems like a sound idea. With housing and rents increasing dramatically in the Bay area, many folks are moving into the outlying area including the North Bay, and the valley areas. Gottschalk stands to benefit from this greatly. Does anyone see this is as a benefit in their areas?

GOT expanded like wild this year, acquiring 34 Lamont's department stores in the Washington, Alaska, and Oregon area. Seemed like the deal was closed rapidly during the summer and all 34 stores were reopened during August and Sept. Same store sales this year have been great, too: +33.9 % for the year!

Earnings grew 25% from 1998 to 1999, and this last quarter marked their first profitable 2nd quarter in 10 years. Heading into the usually strong third and fourth third and fourth quarters, this is great news.
They've accumulated quite a chunk of debt, approx. 80 million vs. 70 million in equity. They've also been buying back 2 million shares throughout the year.

A lot rides on the success of the Lamont re-openings, and that's why I think people are waiting on GOT. Lamont filed Chapter 11, and it's up to GOT to prove that the locations can be profitable for them. All in all, GOT seems like a great potential investment.

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