HSBC to Operate the Gottschalks' Credit Card Business

Gottschalks Inc. today announced that it has signed a new multi-year agreement with HSBC – North America’s retail services business for the operation of the Company’s proprietary credit card business. The card program partnership with HSBC has been a significant driver of sales, profit, and customer loyalty for Gottschalks. As a result of this agreement, Gottschalks expects stronger contribution from the Company’s credit card income.
 
Gottschalks will also work together with HSBC Retail Services on various marketing initiatives designed to increase Gottschalks sales and further build the Company’s credit card business.

Jim Famalette, president and chief executive officer of Gottschalks, said, "We are very pleased to have signed a new and enhanced agreement for the operation of our proprietary credit card business. Approximately 42% of our sales were done through our proprietary credit card in 2006, which was 4% higher than in 2005. While we have had one of the higher levels of proprietary card use in our industry, our penetration is continuing to increase. We anticipate this new agreement will allow us to further grow this important segment. Our credit card operations not only help us offer superior service to our customers but also provide enhanced insight into buying patterns, which has a positive impact on our sales and marketing efforts."