UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C.  20549
                              FORM 10-K


[ X ]     Annual  Report  Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934 (No Fee Required)

For The Fiscal Year Ended February 3, 2001
                          ----------------
                                  or

[   ]     Transition  Report  Pursuant  to Section 13  or  15(d)  of  the
          Securities Exchange Act of 1934 (No Fee Required)

For the transition period from            to
                              ------------  --------------

                    Commission File Number 1-09100
                                           -------

                           Gottschalks Inc.
        -----------------------------------------------------
        (Exact name of Registrant as specified in its charter)

          Delaware                            77-0159791
-------------------------------             --------------
(State or other jurisdiction of             (IRS Employer
 incorporation or organization)          Identification No.)


  7 River Park Place East, Fresno, CA            93720
----------------------------------------      -----------
(Address of principal executive offices)      (Zip code)

Registrant's telephone no., including area code: (559) 434-4800
                                                ---------------
Securities registered pursuant to Section 12(b) of the Act:

                                      Name of each exchange
     Title of Each Class               on which registered
     -------------------              ---------------------

Common Stock, $.01 par value         New York Stock Exchange
----------------------------         -----------------------
                                     Pacific Stock Exchange
                                     -----------------------

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate  by  check  mark whether the Registrant; (1)  has  filed  all
reports  required to be filed by Section 13 or 15(d) of the Securities
Exchange  Act  of  1934 during the preceding 12 months  (or  for  such
shorter period that the Registrant was required to file such reports);
and  (2) has been subject to such filing requirements for the past  90
days. Yes  X
N___

Indicate by check mark if disclosure of delinquent filers pursuant  to
Item  405 of Regulation S-K is not contained herein, and will  not  be
contained,  to  the best of the Registrant's knowledge, in  definitive
proxy or information statements incorporated by reference in Part  III
of this Form 10-K or any amendment to this Form 10-K.   [ X ]

The  aggregate market value of the voting stock held by non-affiliates
of the Registrant as of March 31, 2001:
Common Stock, $.01 par value:  $32,762,345

On  March 31, 2001 the Registrant had outstanding 12,656,769 shares of
Common Stock.

Documents  Incorporated  By Reference: Portions  of  the  Registrant's
definitive  proxy  statement with respect to its Annual  Stockholders'
Meeting  scheduled to be held on June 28, 2001, which  will  be  filed
pursuant  to Regulation 14A, are incorporated by reference  into  Part
III of this Form 10-K.



                             INDEX

                             PART I

                                                       Page No.
                                                       ________
Item 1.   Business...................................       1
Item 2.   Properties.................................      15
Item 3.   Legal Proceedings..........................      16
Item 4.   Submission of Matters to a Vote of
          Security Holders...........................      17


                             PART II

Item 5.   Market for Registrant's Common Stock and
          Related Stockholder Matters................      17

Item 6.   Selected Financial Data....................      17
Item 7.   Management's Discussion and Analysis of
          Results of Operations and Financial
          Condition..................................      21
Item 7A.  Quantitative and Qualitative Disclosures
          About Market Risk..........................      38
Item 8.   Financial Statements and Supplementary
          Data.......................................      40
Item 9.   Changes in and Disagreements with Accountants
          on Auditing and Financial Disclosures......      40

                             PART III

Item 10.  Directors and Executive Officers of the
          Registrant.................................      40
Item 11.  Executive Compensation.....................      42
Item 12.  Security Ownership of Certain Beneficial
          Owners and Management......................      42
Item 13.  Certain Relationships and Related
          Transactions...............................      43

                             PART IV

Item 14.  Exhibits, Financial Statement Schedule and
          Reports on Form 8-K........................      43

Signatures...........................................      79






                             PART I
Item 1.   BUSINESS

GENERAL
_______
          Gottschalks Inc. is a regional department and specialty
store  chain  based in Fresno, California. The Company  currently
operates 79 full-line "Gottschalks" department  stores located in
seven Western states, with 39 stores located in California, 21 in
Washington,  seven in Alaska, five in Idaho, four in Oregon,  two
in  Nevada  and  one  in  Utah.  The  Company  also  operates  17
"Gottschalks" and "Village East" specialty apparel  stores  which
carry  a  limited selection of merchandise. In fiscal  2000,  the
Company's  sales  totaled $663.9 million, a 22.6%  increase  from
fiscal 1999 sales of $541.3 million.

          The  Company's department stores typically offer a wide
range   of   better  to  moderate  brand-name  and  private-label
merchandise,  including men's, women's, junior's  and  children's
apparel; cosmetics, shoes, fine jewelry and accessories; and home
furnishings   including  china,  housewares,   domestics,   small
electric  appliances and furniture (in selected  locations).  The
majority of the Company's department stores range from 40,000  to
150,000 in gross square feet, and are generally anchor tenants of
regional shopping malls or strategically located strip centers.

          The  Company  has operated continuously  for  97  years
since it was founded by Emil Gottschalk in 1904. At the time  the
Company  initially offered its stock to the public in  1986,  the
Company operated 10 department stores. Since then, a total of  69
department stores have been added, with 42 of those stores  being
added  through acquisitions in fiscal 1998 and 2000. The  Company
is incorporated in the state of Delaware.


          Gottschalks   Inc.  has  one  wholly-owned  subsidiary,
Gottschalks Credit Receivables Corporation ("GCRC").  GCRC  is  a
qualified  special  purpose entity which was formed  in  1994  in
connection with a receivables securitization program. (See Note 3
to the Consolidated Financial Statements.)
_________________________


ACQUISITIONS
____________

           The  Company completed the largest acquisition in  its
operating  history on July 24, 2000, strategically expanding  its
presence  throughout the Pacific Northwest and Alaska. Under  the
transaction (hereinafter the "Lamonts acquisition"), the  Company
acquired  37 department store leases, related store fixtures  and
equipment  and  one  store building from  Lamonts  Apparel,  Inc.
("Lamonts"), a bankrupt specialty apparel store chain, for a cash
purchase  price of $20.1 million. Concurrent with the closing  of
the  transaction,  the Company sold one of the store  leases  for
$2.5 million, and subsequently terminated two other store leases,
resulting  in a net cash purchase price of $17.6 million  for  34
store  leases, related store fixtures and equipment and one store
building. The Company did not acquire any of Lamonts' merchandise
inventory,  customer credit card receivables or  other  corporate
assets  in  the  transaction,  nor did  the  Company  assume  any
material  liabilities, other than the 34  store  leases.  The  34
stores  acquired  are  located in five Western  states,  with  19
stores  in  Washington, seven in Alaska, five in  Idaho,  two  in
Oregon  and one in Utah. The newly acquired stores were converted
to  the  Gottschalks  banner, re-merchandised  and  re-opened  in
stages, beginning in late August with all stores completely  open
by September 7, 2000.

           On August 20, 1998, the Company acquired substantially
all  of  the assets and assumed certain liabilities of The Harris
Company ("Harris"), a wholly-owned subsidiary of El Corte  Ingles
("ECI")  of  Spain.  Harris  operated nine  full-line  department
stores  located in the Southern California area. As planned,  the
Company closed one of the acquired stores on January 31, 1999. As
a   result  of  the  acquisition,  Harris  became  a  significant
stockholder of the Company. The Company also leases three of  its
store locations from ECI.

OPERATING STRATEGY
__________________

          Merchandising  Strategy.   The Company's  merchandising
strategy is directed at offering and promoting moderate to upper-
moderately  priced  brand-name  merchandise  recognized  by   its
customers   for  style  and  value.  Brand-name  merchandise   is
complemented with offerings of private-label and other higher and
budget-priced merchandise. Brand-name apparel, shoe, cosmetic and
accessory  lines  carried by the Company  include  Estee  Lauder,
Lancome,  Clinique,  Chanel, Dooney  &  Bourke,  Nine  West,  Liz
Claiborne,  Carole Little, Calvin Klein, Ralph Lauren  (Polo  and
Chaps), Guess, Nautica, Karen Kane, Tommy Hilfiger, Esprit,  Evan
Picone,  Haggar,  Koret and Levi Strauss. Brand-name  merchandise
carried  for  the  home includes Lenox, Krups,  Calphalon,  Royal
Velvet, Ralph Lauren, Tommy Hilfiger, KitchenAid and Samsonite.

          The  Company  has  also  directed  considerable  effort
towards  improving the quality and increasing the penetration  of
private-label  merchandise in its overall  merchandise  mix.  The
Company's  most  well-recognized private-label is "Shaver  Lake",
currently   carried   in  the  women's,  men's   and   children's
departments,  as  well  as  in certain departments  in  the  home
division.  The  "Shaver  Lake" brand is  exclusively  offered  in
Gottschalks  stores,  and  provides an  opportunity  to  increase
Gottschalks'    brand   acceptance   and   promote    competitive
differentiation.

          The   Company   purchases  merchandise  from   numerous
suppliers.  In  no instance did purchases from any single  vendor
amount  to more than 5% of the Company's net purchases in  fiscal
2000.   The  Company's  merchandising  activities  are  conducted
centrally from its corporate offices in Fresno, California.

          The  Company's merchandise mix as a percentage of total
sales  (including  leased department sales) is reflected  in  the
following table:

<TABLE>
<CAPTION>

                                     Fiscal Years
                         2000    1999    1998    1997    1996
                         ----    ----    ----    ----    ----

<S>                      <C>     <C>     <C>     <C>     <C>
Women's Apparel........  28.0%   26.6%   27.0%   27.2%   26.3%
Cosmetics, Shoes
  & Accessories(1).....  22.5    22.2    19.0    17.8    17.5
Home...................  20.8    22.1    22.2    22.7    23.2
Men's Apparel..........  14.0    13.7    14.0    14.0    14.5
Junior's and
 Children's Apparel....  10.7    10.3    10.1    10.5    10.7
Shoes, Fine Jewelry
 & Other Leased
 Departments(1)........   4.0     5.1     7.7     7.8     7.8
                        -----   -----   -----   -----   -----
  Total Sales.........  100.0%  100.0%  100.0%  100.0%  100.0%
_____________________   =====   =====   =====   =====   =====

</TABLE>

      (1)    The   Company   currently  operates   the   shoe
             departments   in   42  of  its  department   stores,
             and    leases    the   operation   of    the    shoe
             departments  in  36  of  its Pacific  Northwest  and
             Alaska    locations.   One    of    the    Company's
             department   stores   does   not   have    a    shoe
             department.   The  Company  expects   to   terminate
             the  shoe  department  lease  at  the  end  of  July
             2001   and   assume  the  operation  of   the   shoe
             departments    in    those    locations    effective
             August   1,  2001.  The  Company  also  leases   the
             operation   of  its  fine  jewelry  department   and
             beauty salons in certain of its stores.

          Store  Location and Expansion Strategy.  The  Company's
stores  are  located  primarily in  diverse,  growing,  non-major
metropolitan  or  suburban areas in the  western  United  States.
Management  believes the Company has a competitive  advantage  in
offering  better to moderate brand-name merchandise  and  a  high
level of service to customers in secondary markets where there is
strong  demand  and fewer competitors offering such  merchandise.
The   Company  has  historically  avoided  expansion  into  major
metropolitan areas which are well served by the Company's  larger
competitors.

          The  Company's  department stores are generally  anchor
tenants of regional shopping malls or strategically located strip
centers.  Other  anchor  tenants in the malls  or  strip  centers
generally  complement  the Company's  goods  with  a  mixture  of
competing  and non-competing merchandise, and serve  to  increase
customer   foot   traffic.  With  new  regional   shopping   mall
construction on the decline, management believes the Company  has
a  competitive advantage in being willing to accommodate  diverse
locations  into  its operation that may not  be  desired  by  its
larger  competitors  that adopt a more standardized  approach  to
expansion.

          The  Company generally seeks to open at least  two  new
department stores per year, although more stores may be opened in
any given year if it is believed to be financially attractive  to
the Company. The Company's future expansion plans include seeking
new  locations  which will serve to "fill in" geographical  areas
between  existing stores. Management believes this strategy  will
improve   the   Company's   ability  to   leverage   advertising,
transportation  and  other operating costs more  effectively.  In
addition  to opening individual store locations, the Company  may
also  pursue  additional selective strategic  acquisitions.  (See
Part I, Item I, "Acquisitions".)

          In  addition  to opening and acquiring new stores,  the
Company has continued to invest in the renovation and refixturing
of  its  existing store locations in an attempt to  maintain  and
improve  market  share  in those market areas.  Store  renovation
projects  can  range  from updating decor and improving  in-store
lighting,  fixturing,  wall merchandising and  signage,  to  more
extensive   remodeling  and  expansion  projects.   The   Company
sometimes receives reimbursement from mall owners and vendors for
certain  of its new store construction costs and costs associated
with  the renovation and refixturing of existing store locations.
Such  contributions have enhanced the Company's ability to  enter
into  attractive  market  areas  that  are  consistent  with  the
Company's long-term expansion plans.

          The  following tables present selected data related  to
the Company's stores for the fiscal years indicated:

<TABLE>
<CAPTION>

                                  Fiscal Years
Stores open at year-end:     2000       1999    1998     1997      1996
-----------------------      ----       ----    ----     ----      ----

<S>                           <C>        <C>     <C>      <C>       <C>
Department stores             79(1)      42      40(2)    34        32
Specialty stores (3)          17         20      22       25        27
                              --         --      --       --        --
    TOTAL                     96         62      62       59        59
                              ==         ==      ==       ==        ==

Gross store square
footage (in thousands):
-----------------------

Department stores          6,139      4,377   4,301    3,391     3,175
Specialty stores              63         77      83       94       101
                           -----      -----   -----    -----     -----
    TOTAL                  6,202      4,454   4,384    3,485     3,276
                           =====      =====   =====    =====     =====
_______________________________

</TABLE>

     (1)  The  Company opened 37 new department stores in  fiscal
     2000, including the 34 store locations acquired from Lamonts
     on  July  24,  2000, and three additional new stores  opened
     during the third and fourth quarter of the year.

     (2)  The Company acquired nine stores from Harris in  August
     1998,  closing  one  of  the  stores  acquired  on
     January 31, 1999, as planned. Two of the stores acquired are
     located  in  malls with pre-existing Gottschalks  locations.
     The Company combines separate locations within the same mall
     for  the  purpose of determining the total number of  stores
     being   operated,  resulting  in  a  net  addition  of   six
     department stores in fiscal 1998.

     (3)  The  Company  closed the pre-existing  specialty  store
     location in Redding, California in fiscal 2000, and opened a
     new  74,200 gross square foot department store in  a  nearby
     location.  The Company has continued to close certain  free-
     standing  Village  East stores as their  leases  expire  and
     incorporate those stores as separate departments into nearby
     Gottschalks  department  stores. Sales  generated  by  these
     departments  are combined with total specialty  store  sales
     for reporting purposes.

           Following  is  a  summary of the Company's  department
store locations, by store size:

                                                      # of
                                                     stores
                                                      open
                                                     ------
          Larger than 200,000 gross square feet         3
          150,000 - 199,999 gross square feet           7
          100,000 - 149,999 gross square feet           9
           40,000 -  99,999 gross square feet          45
           20,000 -  39,999 gross square feet          15
                                                       --
                TOTAL                                  79
                                                       ==


           Marketing Strategy.  The Company's marketing  strategy
is based on a multi-media approach, using newspapers, television,
radio, direct mail and catalogs to highlight seasonal promotions,
selected  brand-name  merchandise and  frequent  storewide  sales
events.  Advertising efforts are focused on communicating branded
merchandise  offered  by  the Company, and  the  high  levels  of
quality,  value and customer service available in  the  Company's
stores.  In  its  efforts  to improve the  effectiveness  of  its
advertising expenditures, the Company uses data captured  through
its  proprietary  credit card and third  party  credit  cards  to
develop segmented advertising and promotional events targeted  at
specific  customers who have established purchasing patterns  for
certain brands, departments or store locations.

           The Company's sales promotion strategy also focuses on
special events such as fashion shows, bridal shows and wardrobing
seminars  in its stores and in the communities in which they  are
located  to  convey fashion trends to its customers. The  Company
receives  reimbursement for certain of its promotional activities
from some of its vendors.

           The Company offers selected merchandise, a Bridal
Registry service, and other general corporate information on  the
World   Wide   Web  at  http://www.gottschalks.com,   and   sells
merchandise through its mail order department.

           Customer  Service.  Management believes  one  way  the
Company  can  differentiate itself from  its  competitors  is  to
provide  a  consistently  high level  of  customer  service.  The
Company  has a "Four Star" customer service program, designed  to
continually  emphasize  and  reward high  standards  of  customer
service  in the Company's stores. Sales associates are encouraged
to keep notebooks of customers' names, clothing sizes, birthdays,
and major purchases, and to telephone customers about promotional
sales  and to send thank-you notes and other greetings  to  their
customers during their normal working hours. Product seminars and
other training programs are frequently conducted in the Company's
stores  and  its  corporate headquarters  to  ensure  that  sales
associates will be able to provide useful product information  to
customers.   The Company also offers opportunities for management
training  and leadership classes for those associates  identified
for  promotion  within the Company. Various financial  incentives
are  offered to the Company's sales associates for reaching sales
performance goals.

          In addition to providing a high level of personal sales
assistance,  management  believes  that  well-stocked  stores,  a
liberal return and exchange policy, frequent sales promotions and
a   conveniently  located  and  attractive  shopping  environment
enhance  its customers' shopping experience and increase customer
loyalty.  Management  also believes that maintaining  appropriate
staffing  levels  in  its stores, particularly  at  peak  selling
periods,  is  essential for providing a high  level  of  customer
service.

                  Distribution   of  Merchandise.   The   Company
currently  distributes  merchandise to  its  stores  through  two
distribution  centers. The Company's primary distribution  center
is  a 420,000 square foot facility located in Madera, California.
The  facility, constructed in 1989, is located in close proximity
to  the  Company's corporate headquarters in Fresno,  California.
The  facility currently serves 42 locations, including all of the
stores  located in California and Nevada, and two stores  located
in  Oregon. The Company currently distributes merchandise to  its
newly  acquired locations in Washington, Alaska, Idaho, Utah  and
two  of  the  stores  located  in Oregon  through  an  outsourced
facility   located   in  Kent,  Washington.   In   fiscal   2000,
approximately  89.0%  of  the total sales  of  the  Company  were
generated by the locations serviced through the Company's  Madera
distribution center. In fiscal 2001, that amount is  expected  to
be in excess of 75.0%. Distributions are made on a daily basis to
the stores from both of the facilities.

                  The  Company  has  continued  to  improve   its
logistical  systems, focusing on the adoption of  new  technology
and  operational  best practices, with the  goals  of  receiving,
processing  and distributing merchandise to stores  at  a  faster
rate  and  at  a  lower  cost  per unit.  The  logistical  system
currently  installed at its Madera distribution facility  enables
the  Company  to  "cross dock" a significant  percentage  of  its
merchandise  and  process  merchandise through  the  distribution
center  and  to  the stores in minutes and hours as  compared  to
several  days in the past. The Company has formal guidelines  for
vendors  with  respect to shipping, receiving and  invoicing  for
merchandise.  Vendors that do not comply with the guidelines  are
charged  specified  fees  depending  upon  the  degree  of   non-
compliance.  Such  fees  are  intended  to  offset  higher  costs
associated   with  the  processing  of  and  payment   for   such
merchandise.

          Private-Label Credit Card.  The Company issues its  own
credit  card,  which management believes enhances  the  Company's
ability to generate and retain market acceptance and increase its
sales  and other revenues. As described more fully in Note  3  to
the  Consolidated  Financial Statements, the  Company  sells  its
customer  credit card receivables to its wholly-owned subsidiary,
GCRC,  on  an  ongoing  basis in connection  with  a  receivables
securitization program. The Company has continued to service  and
administer the receivables under the program.

          The following table represents a summary of information
related to the Company's credit card receivable portfolio for the
fiscal years indicated:

<TABLE>
<CAPTION>

                                      Fiscal Years
                        2000      1999       1998      1997       1996
                        ----      ----       ----      ----       ----
                                   (In thousands of dollars)

Average credit
 card receivables
 <S>                   <C>        <C>        <C>      <C>        <C>
 serviced (1)          $80,992    $79,125    $69,143  $64,612    $64,162

Service charge income  $16,832    $15,618    $13,522  $11,711    $10,604

Credit sales as a
  % of total sales        41.4%(2)   44.2%      43.1%    43.7%      43.1%
_______________________

</TABLE>

       (1)   Includes receivables sold, the retained interest in
             receivables sold, and other receivables, all of which
             are serviced by the Company.

       (2)   Excluding  credit sales generated in  the  37  stores
             opened in fiscal 2000, which are currently generating a
             lower credit sales percentage than the Company's  more
             mature  stores, credit sales as a percentage  of  total
             sales was 43.9% for fiscal 2000.

      The  Company has a variety of credit-related programs which
management  believes  have  improved customer  service  and  have
increased service charge revenues. Such programs include:

            -   an    "Instant   Credit"   program,   through
                which   successful  credit  applicants  receive   a
                discount  ranging  from 10% to  50%  (depending  on
                the  results  of  the  Instant  Credit  scratch-off
                card)  on  the  first  day's  purchases  made  with
                the Company's credit card;

            -   a  "55-Plus"  charge  account  program,  which
                offers    additional   merchandise   and    service
                discounts  to  customers  55  years  of   age   and
                older;

            -   "Gold   Card"   and   "55-Plus   Gold   Card"
                programs,  which  offer  special  services   at   a
                discount  for  customers who  have  a  minimum  net
                spending  history  on  their  charge  accounts   of
                $1,000 per year; and

            -   The   "Gottschalks  Rewards"  program,   which
                offers  an  annual  rebate certificate  for  up  to
                5%  of  annual  credit purchases on  the  Company's
                credit  card  (up  to  a  maximum  of  $10,000   of
                annual  purchases)  which can  be  applied  towards
                future purchases of merchandise.

      As  of  March  31, 2001, the Company had approximately
747,000 active credit card holders, as compared to 650,000 active
credit  card  holders  as of March 31, 2000. Management  believes
holders   of  the  Company's  credit  card  typically  buy   more
merchandise from the Company than other customers.

      Competition and Seasonality.  See Part I, Item I, "Risk
Factors  --  Competition" and "Risk Factors  --  Seasonality  and
Weather".

       Employees.    As of February 3, 2001, the  Company  had
approximately 8,300 employees, including 2,200 employees  working
part-time (less than 20 hours per week on a regular basis). As of
January  29,  2000,  the Company had 6,550  employees  (including
1,950  working part-time). The Company hires additional temporary
employees  and increases the hours of part-time employees  during
seasonal  peak  selling periods. Employees in eight former Lamonts
locations in King County Washington are covered by a collective
bargaining agreement.  Lamonts had a collective bargaining agreement
with the United Food and Commercial Worker's Union (UFCW) covering
approximately 300 store associates in eight stores. Since the acquisition
of Lamonts' assets, which included the leases of those eight stores, the
Company engaged in good faith bargaining with the union.  As a result, an
agreement with a 2 1/2 year term was ratified by the union on
April 7, 2001.  Management does not  believe that the agreement
will have a material affect  on  the  Company's business, its financial
condition  or results   of   operations.  Management  considers  its
employee relations to be good.

        Executive  Officers  of  the  Registrant.   Information
relating to the Company's executive officers is included in  Part
III,  Item  10  of  this  report and is  incorporated  herein  by
reference.

FORWARD-LOOKING STATEMENTS
__________________________

            This  Form  10-K  contains  certain  "forward-looking
statements"  regarding  activities, developments  and  conditions
that  the  Company anticipates may occur or exist in  the  future
relating to things such as:

           - revenues and earnings;
           - savings or synergies from acquisitions;
           - future capital expenditures;
           - the Company's expansion strategy;
           - the impact of acquisitions;
           - the  impact of sales promotions and customer service
             programs on consumer spending;
           - the   termination   of   the   shoe   department
             leases;
           - the Company's competitive advantages;
           - the    amount    of    merchandise    to    be
             distributed    through   the   Madera    distribution
             center;
           - lease   extensions   and  suitable   alternative
             store locations;
           - the   Company's  future  operation  of  the   34
             stores acquired in the Lamonts acquisition
           - the   impact   of  the  current  energy   crisis
             in the Western United States; and
           - the utilization of consumer credit programs.

Such  forward-looking statements can be identified by words  such
as:  "believes,"  "anticipates," "expects,"  "intends,"  "seeks,"
"may,"  "will," and "estimates".  The Company bases its  forward-
looking  statements on its current views and  assumptions.  As  a
result,  those  statements are subject to risks and uncertainties
that  could cause actual results to differ materially from  those
predicted.  Some  of the factors that could cause  the  Company's
results to differ from those predicted include the following risk
factors. The following list of important factors is not exclusive
and  the Company does not undertake to revise any forward-looking
statement to reflect events or circumstances that occur after the
statement is made.

RISK FACTORS
____________

           Lamonts  Acquisition.  On July 24, 2001,  the  Company
acquired  34 former Lamonts store leases, related store  fixtures
and equipment, and one store building for a net purchase price of
$17.6   million  in  cash.  This  acquisition  has  substantially
increased the size and scope of the Company. No assurance can  be
given  that  the  Company  will be  successful  in  managing  and
operating  the acquired stores or that such activities  will  not
require a disproportionate amount of management's attention.   In
addition,  the costs associated with the Lamonts acquisition,  as
well  as lower than expected operating results at certain of  the
former Lamonts stores during their first five months of operation
by  the  Company, contributed to a $36.3 million  operating  cash
flow  deficit in fiscal 2000. Although the Company is  evaluating
certain  initiatives  to improve the performance  of  the  stores
acquired from Lamonts, there can be no assurance that the Company
will  be able to profitably operate the former Lamonts stores  in
the future. The Company's inability to successfully integrate the
acquired  stores  could  have a material adverse  affect  on  the
Company's financial condition and results of operations.

           General Economic and Market Conditions.  The Company's
stores  are located primarily in non-major metropolitan, suburban
and   agricultural  areas  in  the  western  United  States.    A
substantial  portion of the stores are located in California  and
Washington. The Company's success depends upon consumer spending,
which  may  be materially and adversely affected by  any  of  the
following events or conditions:

          -  a  downturn  in the national, California  or
             Pacific Northwest economy;
          -  a  downturn in the local economies where the stores
             are located;
          -  a decline in consumer confidence;
          -  an increase in interest rates;
          -  inflation or deflation;
          -  consumer credit availability;
          -  consumer debt levels;
          -  the   energy  crisis  in  California   and   the
             Pacific Northwest;
          -  healthcare and workers' compensation
             insurance costs;
          -  tax rates and policy; and
          -  unemployment trends.

           Seasonality  and Weather.  Seasonal influences  affect
the  Company's  sales and profits.  The Company  experiences  its
highest  levels of sales and profits during the Christmas selling
months  of November and December, and, to a lesser extent, during
the  Easter holiday and Back-to-School seasons.  The Company  has
increased working capital needs prior to the Christmas season  to
carry   significantly  higher  inventory  levels  and   generally
increases  its selling staff levels to meet anticipated  demands.
Any  substantial  decrease in sales during its  traditional  peak
selling  periods could materially adversely impact the  Company's
business, financial condition and results of operations.  Factors
that could cause results to vary include:

          -  the timing and level of sales promotions;
          -  the weather;
          -  fashion trends;
          -  local unemployment levels; and
          -  the  overall health of the national,  regional
             and local economies.

           The  Company depends on normal weather patterns across
its   markets.   Historically,  unusual  weather  patterns   have
significantly impacted its business.

           Consumer  Trends.   The  Company's  success  partially
depends  on  its  ability to anticipate and respond  to  changing
consumer  preferences  and fashion trends  in  a  timely  manner.
However,  it  is difficult to predict what merchandise  consumers
will  demand,  particularly merchandise  that  is  trend  driven.
Failure   to  accurately  predict  constantly  changing  consumer
tastes, preferences and spending patterns could adversely  affect
short and long term results.

            Expansion   Strategy  -  Future  Growth  and   Recent
Acquisitions.  The Company's expansion strategy involves  opening
and  acquiring  new  stores or remodeling and expanding  existing
stores.  The  successful implementation of such  expansion  plans
(including any potential acquisitions) depends upon many factors,
including the ability of the Company to:

           - identify,  negotiate,  finance,  obtain,  construct,
             lease or refurbish suitable store sites;
           - hire,  train  and retain qualified  personnel;
             and
           - integrate   new  stores  into  existing  information
             systems and operations.

           The Company cannot guarantee that it will achieve  its
targets for opening or acquiring new stores or for remodeling  or
expanding  existing  stores, or that  such  stores  will  operate
profitably  when  opened or acquired. If  the  Company  fails  to
effectively implement its expansion strategy, it could materially
and  adversely affect the Company's business, financial condition
and results of operations. In addition, while the Company has not
historically  closed  department  stores,  it  may  consider  the
closure of stores in the future.

            Competition.    The   retail   business   is   highly
competitive. The Company's primary competitors include  national,
regional and local chain department and specialty stores, general
merchandise stores, discount and off-price retailers  and  outlet
malls.  Increased  use and acceptance of the internet  and  other
home  shopping formats also creates increased competition.   Some
of  these competitors offer similar or better branded merchandise
and   have   greater  financial  resources  to  purchase   larger
quantities of merchandise at lower prices.  The Company's success
in  counteracting  these  competitive pressures  depends  on  its
ability to:

           - offer   merchandise  which  reflects  the  different
             regional and  local needs of its customers;
           - differentiate  and  market itself  as  a  home-town,
             locally-oriented  store  (as  opposed  to  its  more
             nationally focused competitors); and
           - continue  to offer adequate quantities of better  to
             moderate branded merchandise.

            Existing  or new competitors, however, may  begin  to
carry  such brand-name merchandise or increase their offering  of
better  quality  merchandise  which  may  negatively  impact  the
Company's   business,   financial  condition   and   results   of
operations.

           Vendor  Relations.    The Company believes  its  close
relationships  with  its  key  vendors  enhance  its  ability  to
purchase  brand-name merchandise at competitive prices.   If  the
Company  loses key vendor support or its vendors withdraw  brand-
name merchandise, it could have a material adverse effect on  the
Company's   business,   financial  condition   and   results   of
operations.  The Company cannot guarantee that it will be able to
acquire  brand-name  merchandise  at  competitive  prices  or  on
competitive terms in the future.

           Leverage and Restrictive Covenants.  Due to the  level
of  the  Company's indebtedness, any material adverse development
affecting  the Company could significantly limit its  ability  to
withstand  competitive pressures and adverse economic conditions,
take  advantage  of  expansion  opportunities  or  to  meet   its
obligations  as  they  become due.  The Company's  existing  debt
agreements impose operating and financial restrictions that limit
the  Company's ability to make dividend payments and grant liens,
among other matters.

          Interest Rate Risk.  The Company's borrowings under its
revolving line of credit facility, 2000-1 Series certificate  and
one  of  its  long-term financing agreements bear interest  at  a
variable  rate.  If  interest rates increase  significantly,  the
Company's   financial  results  could  be  materially   adversely
affected.  See Item 7A, "Quantitative and Qualitative Disclosures
About Market Risk."

           California  Electric Utilities Crisis.  A  substantial
portion of the Company's stores are located in California.  As  a
result,   the  Company  is  particularly  sensitive  to  negative
occurrences in that state. Recently, problems associated with the
deregulation of the electric industry in California have resulted
in  intermittent service interruptions and are expected to result
in  significantly  higher  utility rates  for  the  Company.  The
Company's  inability to adequately address these  problems  could
have  a  material  adverse affect on its financial  position  and
results   of   operations.   Management   believes   that   power
interruptions and higher utilities costs may also be incurred  in
certain other states in which the Company operates.

           Consumer  Credit  Risks.  The Company's  private-label
credit  card  facilitates sales and generates additional  revenue
from credit card fees.  Changes in credit card use, default rates
or  in  the  laws regulating the granting or servicing of  credit
(including  late fees and finance charges applied to  outstanding
balances)   could  materially  adversely  affect  the   Company's
business,  financial  condition and results  of  operations.   In
addition,  the  Company cannot guarantee  that  the  credit  card
programs  it  has implemented will increase or maintain  customer
spending.

           Securitization  of Accounts Receivable.   The  Company
securitizes  the  receivables generated under  its  private-label
credit card. Under the securitization program, the Company  sells
all  of  its  customer credit card receivables to a  wholly-owned
subsidiary,   GCRC,  and  those  receivables  are  simultaneously
conveyed  to  a  qualified special purpose  entity  which  issues
securities   representing  interests  in   the   receivables   to
investors. The Company cannot guarantee that it will continue  to
generate receivables by credit card holders at the same rate,  or
that  it  will establish new credit card accounts at the rate  it
has  in  the  past.   Any material decline in the  generation  of
receivables  or  in the rate of cardholder payments  on  accounts
could  have a material adverse effect on the Company's  financial
condition and results of operations.

           Dependence  on  Key Personnel.  The Company's  success
depends  to a large extent on its executive management team.  The
loss  of the services of certain of its executives could  have  a
material  adverse  effect  on the Company.   The  Company  cannot
guarantee  that it will be able to retain such key  personnel  or
attract  additional qualified members to its management  team  in
the future.

           Labor  Conditions.  The Company depends on  attracting
and  retaining a large number of qualified employees to  maintain
and  increase sales and to execute its customer service programs.
Many  of  the employees are in entry level or part-time positions
with historically high levels of turnover.  The Company's ability
to  meet  its  employment  needs is dependent  on   a  number  of
factors,  including  the  following  factors  which  affect   the
Company's ability to hire or retain qualified employees:

          -  unemployment levels;
          -  minimum wage legislation; and
          -  changing  demographics in the local economies  where
             stores are located.

Item 2.   PROPERTIES

          Corporate   Offices  and  Distribution  Centers.    The
Company's  corporate  headquarters  are  located  in  an   office
building  in  northeast  Fresno,  California.  The  building  was
constructed in 1991 by a limited partnership in which the Company
is  the  sole  limited  partner holding a  36%  interest  in  the
partnership  and  the building constructed.  The  Company  leases
89,000  square feet of the 176,000 square foot building  under  a
twenty-year  lease expiring in the year 2011. The lease  contains
two consecutive ten-year renewal options and the Company receives
favorable rental terms under the lease. The Company believes that
its  current  office space is adequate to meet its  office  space
requirements for the foreseeable future.

          The Company's primary distribution center, completed in
1989,  is a 420,000 square foot distribution facility located  in
Madera,  California, which is in close proximity to the Company's
corporate  headquarters. The facility was originally designed  to
provide  for the future growth of the Company and its  processing
capacity  and  physical size is readily expandable.  The  Company
leases the distribution facility from an unrelated party under  a
20-year  lease  expiring in the year 2009, with  six  consecutive
five-year renewal options. The Company also leases a distribution
center located in Kent, Washington from an unrelated party  under
a one-year lease expiring in February 2002.


               Store Leases and Locations.   The Company owns seven of
its  79 department stores, and leases the remaining 72 department
stores  and all of its 17 specialty stores. Most of the Company's
department store leases expire in various years through 2021, and
have renewal options for one or more periods ranging from five to
20  years. Leases for specialty store locations generally do  not
contain  renewal  options. While there is no assurance  that  the
Company  will  be  able to negotiate further  extensions  of  any
particular   lease,   management   believes   that   satisfactory
extensions  or  suitable  alternative  store  locations  will  be
available.

           Certain of the department and specialty apparel leases
provide for the payment of additional contingent rentals based on
a  percentage  of  sales, require the payment of property  taxes,
insurance  and  maintenance costs, and  in  certain  cases,  also
provide  for rent abatements and scheduled rent increases  during
the  lease  terms.  The Company leases three  of  its  department
stores   from  ECI,  an  affiliate  of  the  Company.  Additional
information pertaining to the Company's store leases is  included
in Note 9 to the Consolidated Financial Statements.

           The  following  table contains additional  information
about the Company's stores open as of the end of fiscal 2000:

                               #        Gross
                              of        Square
  State                     Stores     Footage(1)
  -----                     ------     ---------
Department Stores
-----------------

California                    39       4,104,250
Washington                    21       1,036,500
Alaska                         7         358,300
Idaho                          5         214,500
Oregon                         4         183,100
Nevada                         2         206,000
Utah                           1          36,500
                              --       ---------
     Total                    79       6,139,150
                              ==       =========
Specialty Stores:
-----------------

California                    16          59,550
Nevada                         1           3,400
                              --          ------
    Total                     17          62,950
__________                    ==          ======


     (1)  Reflects  total store square footage, including  office
          space, storage, service and other support space that is
          not dedicated to direct merchandise sales.


Item 3.   LEGAL PROCEEDINGS

          The  Company is party to legal proceedings  and  claims
which have arisen during the ordinary course of business. In  the
opinion  of  management, the ultimate outcome of such  litigation
and  claims is not expected to have a material adverse effect  on
the Company's financial position or results of its operations.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

          No matters were submitted to a vote of security holders
of  the  Company  during the fourth quarter of  the  fiscal  year
covered in this report.


                              PART II

Item 5.   MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED
          STOCKHOLDER MATTERS

          The  Company's  common stock is listed for  trading  on
both  the New York Stock Exchange ("NYSE") and the Pacific  Stock
Exchange.  The following table sets forth the high and low  sales
prices  per  share  of  common stock  as  reported  on  the  NYSE
Composite  Tape  under  the  symbol  "GOT"  during  the   periods
indicated:

                          2000              1999
                     --------------     --------------
Fiscal Quarters      High      Low      High       Low
---------------      ----      ---      ----       ---

1st Quarter          6.94      4.69     7.81       6.75
2nd Quarter          6.56      4.38     9.19       7.19
3rd Quarter          6.81      4.75     9.19       8.06
4th Quarter          4.94      4.13     9.06       6.81


      On  March  30,  2001, the Company had 812  stockholders  of
record,  some  of  which were brokerage firms or  other  nominees
holding  shares for multiple stockholders. The closing  price  of
the  Company's common stock as reported by the NYSE on March  30,
2001 was $5.05 per share.

          The  Company  has  not paid a cash dividend  since  its
initial  public offering in 1986. The Board of Directors  has  no
present  intention  to  pay  cash dividends  in  the  foreseeable
future,  and will determine whether to declare cash dividends  in
the   future  depending  on  the  Company's  earnings,  financial
condition  and  capital requirements. In addition, the  Company's
credit  agreement  with Congress Financial Corporation  prohibits
the  Company from paying dividends without prior written  consent
from that lender.


Item 6.   SELECTED FINANCIAL DATA

          The  Company reports on a 52/53 week fiscal year ending
on  the  Saturday nearest to January 31. The fiscal  years  ended
February 3, 2001, January 29, 2000, January 30, 1999, January 31,
1998 and February 1, 1997, are referred to herein as fiscal 2000,
1999,  1998, 1997 and 1996, respectively.  All fiscal years noted
include  52  weeks,  except for fiscal 2000,  which  includes  53
weeks.  The Company's results of operations for fiscal 2000  were
not materially affected by the 53rd week.

          The  selected financial data below should  be  read  in
conjunction  with Part II, Item 7, "Management's  Discussion  and
Analysis  of Financial Condition and Results of Operations,"  and
the  Consolidated Financial Statements of the Company and related
notes  included  elsewhere  herein.  The  Company  completed  the
acquisition  of  34  stores from Lamonts on July  24,  2000.  The
acquisition  has  affected  the comparability  of  the  Company's
financial  results. In addition, as described in Note  1  to  the
Consolidated  Financial  Statements,  certain  amounts   in   the
accompanying   fiscal  1999,  1998,  1997  and   1996   financial
statements have been reclassified to conform with the fiscal 2000
presentation.

<TABLE>
<CAPTION>


RESULTS OF OPERATIONS:
-----------------------
                                           Fiscal Years
                             2000       1999       1998      1997     1996
                             ----       ----       ----      ----     ----
                              (In thousands of dollars, except share data)

<S>                        <C>        <C>        <C>        <C>      <C>
Net sales                  $663,868   $541,275   $478,538   $414,361 $390,749
Net credit revenues           9,150      8,709      6,988      6,478    4,886
Net leased department
  revenues(1)                 3,948      4,209      5,944      5,135    4,198
                            -------    -------    -------    -------  -------
   Total revenues           676,966    554,193    491,470    425,974  399,833

Costs and expenses:
    Cost of sales           433,724    354,010    313,431    274,843  259,524
    Selling, general and
      administrative
      expenses              201,765    167,561    152,231    132,034  124,976
    Depreciation and
      amortization(2)        11,505      9,465      8,040      6,078    5,585
    New store pre-opening
      costs(3)                6,183        495        421        589    1,337
    Asset impairment charge(4)           1,933
    Acquisition related
      expenses                                        859        673
                            -------    -------    -------    -------  -------
        Total costs
         and expenses       653,177    533,464    474,982    414,217  391,422
                            =======    =======    =======    =======  =======

Operating income             23,789     20,729     16,488     11,757    8,411

Other (income) expense:
 Interest expense            13,750     11,408      9,470      7,325    8,111
 Miscellaneous income        (1,414)    (1,555)    (2,011)    (1,955)  (2,792)
                            -------    -------    -------    -------  -------
                             12,336      9,853      7,459      5,370    5,319
                            -------    -------    -------    -------  -------
Income before
 income tax expense          11,453     10,876      9,029      6,387    3,092

Income tax expense            4,374      4,240      3,747      2,657    1,258
                            -------    -------    -------    -------  -------

Net income                 $  7,079   $  6,636   $  5,282   $  3,730 $  1,834
                            =======    =======    =======    =======  =======
Net income per
 common share -
 basic and diluted         $   0.56   $   0.53   $   0.46   $   0.36 $   0.18
                            =======    =======    =======    =======  =======
Weighted-average
  number of common
  shares outstanding:
     Basic                   12,614     12,577     11,418     10,474   10,461
Diluted                      12,632     12,616     11,449     10,491   10,461


</TABLE>


<TABLE>
<CAPTION>

SELECTED BALANCE SHEET DATA:
----------------------------
                                               Fiscal Years
                              2000       1999       1998       1997     1996
                              ----       ----       ----       ----     ----
                                      (In thousands of dollars)

Retained interest in
 <S>                         <C>        <C>        <C>       <C>      <C>
 receivables sold            $19,853    $29,138    $ 37,399  $ 15,813 $ 20,871
Receivables, net               8,840      7,597      18,985     6,650    4,636
Merchandise
 inventories                 185,226    130,028     123,118    99,294   89,472
Property and
 equipment, net              143,670    120,393     113,645    99,057   87,370
Total assets                 407,221    316,164     326,596   244,080  234,370
Working capital              115,052    104,719      96,231    67,579   70,231
Long-term obligations,
 less current portion        113,012     80,674      74,114    62,420   60,241
Subordinated note
 payable to affiliate         21,303     20,961      20,618      ---     ---
Stockholders' equity         117,573    110,238     103,468    83,905   80,139

OTHER SELECTED DATA:
-------------------
                                                Fiscal Years
                              2000        1999        1998       1997     1996
                              ----        ----        ----       ----     ----
                                          (In thousands of dollars,
                                         except per square foot data)
Sales growth:
 Total store sales             22.6%(5)     9.9%       15.4%      6.2%     5.3%
 Comparable store
   sales(6)                     5.6%(7)     7.7%        2.1%      3.3%     1.4%

Comparable stores data(8):
 Sales per selling
  square foot               $   176     $   168     $   170    $  160   $  170
 Selling square
  footage                     3,384       2,758       2,621     2,642    2,161

Capital expenditures        $25,704     $16,059     $16,801   $14,976   $6,845
Current ratio                1.93:1      2.38:1      1.98:1    2.01:1   2.10:1
____________________________

</TABLE>

     (1)  Net    leased    department   revenues    consist    of
          sales    totaling   $27.7   million,   $29.0   million,
          $40.2   million,  $35.2  million  and   $32.8   million
          in   fiscal   2000,   1999,  1998,   1997   and   1996,
          respectively, less cost of sales.

     (2)  Depreciation and amortization includes the amortization
          of  goodwill  and favorable lease rights (beginning  in
          fiscal  2000) totaling $666,000, $536,000 and  $291,000
          in  fiscal  2000,  1999  and  1998,  respectively,  and
          $116,000 in both 1997 and 1996.

     (3)  Fiscal   2000  includes  $5.6  million  pre-tax   ($3.5
          million,  or  $0.28  per  share,  after-tax)  of   non-
          recurring costs associated with the re-opening  of  the
          stores   acquired  from  Lamonts  on  July  24,   2000.
          Excluding this amount, net income for fiscal  2000  was
          $10.6 million, or $0.84 per share.

     (4)  Represents a non-recurring charge related
          to  the  write-off of an investment in  a  co-operative
          buying  group.  Excluding this amount, net  income  for
          fiscal 1999 was $7.8 million, or $0.62 per share.

     (5)  The    increase    in    total    store    sales     in
          fiscal   2000   is  partially  due  to   the   addition
          of   34   stores   acquired  from   Lamonts   in   July
          2000.     (See     "Management's     Discussion     and
          Analysis   of  Financial  Condition  and   Results   of
          Operations - Net Sales" below.)

     (6)  Comparable  store  sales in fiscal 1999 were materially
          affected by the termination of  the  shoe department leases
          in 28 department stores effective August 1, 1999, and by the
          implementation  of Staff  Accounting  Bulletin ("SAB") No.  101,
          "Revenue Recognition  in  Financial Statements", which  requires
          the  Company  to  report  sales in  leased  departments
          separately  from sales in owned departments. Comparable
          store sales data for fiscal years 1995 - 1998 would not
          be  materially  affected  by the  exclusion  of  leased
          department  sales,  due  to  the  consistency  of   the
          contribution of those departments during those years.

     (7)  Represents  comparable  store sales  growth for the first 52
          weeks of fiscal 2000 as compared  to the same period of fiscal
          1999. Comparable store  sales  for  the 53 week period  in  fiscal
          2000 increased by 6.9% as compared to the 52 week period  in
          fiscal 1999.

     (8)  Includes leased department sales in order to facilitate
          an understanding of the Company's sales relative to its
          selling square footage.


Item 7.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF   FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

           Following  is management's discussion and analysis  of
significant  factors which have affected the Company's  financial
position  and its results of operations for the periods presented
in   the  accompanying  Consolidated  Financial  Statements.   As
described  more  fully  in Note 2 to the  Consolidated  Financial
Statements, the Company completed the largest acquisition in  its
operating  history on July 24, 2000, acquiring 34  store  leases,
related store fixtures and equipment, and one store building from
Lamonts.  As  noted  below,  the  acquisition  has  affected  the
comparability  of the Company's financial results.  In  addition,
fiscal  2000 results include 53 weeks as compared to 52 weeks  in
fiscal  1999.  Management  believes  the  Company's  results   of
operations  for  fiscal  2000  were not  materially  affected  by
results applicable to the 53rd week.

Results of Operations
______________________

            The  following  table  sets  forth  for  the  periods
indicated  certain  items from the Company's Consolidated  Income
Statements, expressed as a percent of net sales:


<TABLE>
<CAPTION>

                                             Fiscal Years
                                    2000          1999         1998
                                    ----          ----         ----
<S>                                 <C>           <C>          <C>
Net sales                           100.0%        100.0%       100.0%
Net credit revenues                   1.4           1.6          1.5
Net leased department revenues        0.6           0.8          1.2
                                    -----         -----        -----
                                    102.0         102.4        102.7

Costs and expenses:
   Cost of sales                     65.3          65.4         65.5
   Selling, general and
     administrative expenses         30.4          31.0         31.8
   Depreciation and amortization      1.7           1.7          1.7
     New   store  pre-opening  costs  1.0           0.1          0.1
   Asset impairment charge                          0.4
   Acquisition related costs                                     0.1
                                    -----         -----        -----
                                     98.4          98.6         99.2
                                    -----         -----        -----

Operating income                      3.6           3.8          3.5

Other (income) expense:
   Interest expense                   2.1           2.1          2.0
   Miscellaneous income              (0.2)         (0.3)        (0.4)
                                    -----         -----        -----
                                      1.9           1.8          1.6
                                    -----         -----        -----
Income before income tax expense      1.7           2.0          1.9

  Income tax expense                  0.6           0.8          0.8
                                    -----         -----        -----
Net income                            1.1%          1.2%         1.1%
                                    =====         =====        =====

</TABLE>



Fiscal 2000 Compared to Fiscal 1999

Net Sales
__________

          Net sales increased by approximately $122.6 million, or
22.6%,  to  $663.9 million in fiscal 2000 as compared  to  $541.3
million  in  fiscal  1999.  This increase  is  primarily  due  to
additional sales volume generated by the 37 stores opened  during
the  second half of fiscal 2000, and by two new stores opened  in
Danville  and  Davis, California in October  and  November  1999,
respectively.  The  increase is also due to a  6.9%  increase  in
comparable store sales. Fiscal 2000 included 53 weeks of sales as
compared to 52 weeks in fiscal 1999. Excluding the 53rd  week  in
fiscal  2000, net sales increased by 21.1%, with a 5.6%  increase
in comparable store sales. The increase in comparable store sales
in fiscal 2000 resulted partially from the conversion of the shoe
departments  in  28 Gottschalks locations from  leased  to  owned
departments, effective August 1, 1999. Sales generated  in  those
departments  prior to the termination of the lease on  August  1,
1999 are included in Net Leased Department Revenues, as described
below.

           The  Company  operated  79 department  stores  and  17
specialty  apparel  stores  as of the  end  of  fiscal  2000,  as
compared to 42 department stores and 20 specialty apparel  stores
as  of  the  end of fiscal 1999. Thirty-seven of these department
stores  were opened in the second half of fiscal 2000,  including
the  34 stores which were acquired from Lamonts on July 24,  2000
and   re-opened  during  the  period  beginning  August  24   and
continuing  through September 7, 2000, and the three  new  stores
opened  in  Grants  Pass,  Oregon, Walla  Walla,  Washington  and
Redding,  California on August 23, November 8  and  November  10,
2000,  respectively. The new department store  in  Redding  is  a
replacement for a pre-existing specialty store in that  location,
which was closed.

Net Credit Revenues
_____________________

           Net  credit  revenues associated  with  the  Company's
private  label  credit card increased by $441,000,  or  5.1%,  in
fiscal  2000  as  compared to fiscal 1999. As a  percent  of  net
sales,  net  credit revenues decreased to 1.4% of  net  sales  in
fiscal  2000  as  compared  to 1.6% in fiscal  1999.  Net  credit
revenues consist of the following:

(In thousands of dollars)                      2000      1999
_________________________________________________________________

Service charge revenues                       $16,832   $15,618
Interest expense on securitized
      receivables                              (4,425)   (4,069)
Charge-offs on receivables sold and
  provision for credit losses on
  receivables ineligible for sal  e            (3,642)   (3,013)
Gain on sale of receivables                       385       173
                                               ------    ------
                                              $ 9,150   $ 8,709
                                               ======    ======

          Service charge revenues increased by approximately $1.2
million, or 7.8%, in fiscal 2000 as compared to fiscal 1999,  but
as  a  percent of net sales, decreased to 2.5% in fiscal 2000  as
compared to 2.9% in fiscal 1999. The dollar increase is primarily
due to a change in the method of assessing service charges to  an
average-daily  balance  method effective April  1999  (previously
assessed based on the balance as of the end of a billing period),
an  increase  in  the  volume of late charge  fees  collected  on
delinquent  credit  card balances and additional  service  charge
revenues  generated  by  newly originated  customer  credit  card
accounts  in  the Company's 37 new stores opened in fiscal  2000.
The  decrease  as a percentage of net sales is primarily  due  to
lower  average outstanding balances on newly originated  customer
accounts  in those 37 new stores, and such accounts are currently
generating  lower  service charge revenues as compared  to  those
produced by more established accounts. The Company's credit sales
as a percent of total sales were 41.4% in fiscal 2000 as compared
to  44.2% in fiscal 1999. Excluding credit sales generated in the
37  new stores, credit sales as a percentage of total sales  were
43.9% in fiscal 2000.

           Interest  expense on securitized receivables increased
by  $356,000, or 8.7%, in fiscal 2000 as compared to fiscal 1999.
This  increase is primarily due to a higher level of  outstanding
securitized  borrowings  during the  period  resulting  from  the
issuance  of  the  2000-1 Series certificate  in  November  2000.
Charge-offs  on  receivables sold and the  provision  for  credit
losses  on receivables ineligible for sale increased by $629,000,
or 20.9%, in fiscal 2000 as compared to fiscal 1999. As a percent
of  net  sales, however, such losses decreased to 0.5% in  fiscal
2000  as  compared to 0.6% in fiscal 1999. The gain  on  sale  of
receivables  increased by $212,000 in fiscal 2000 as compared  to
fiscal  1999  as  a  result  of an  increase  in  the  volume  of
receivables sold as compared to the prior year.

Net Leased Department Revenues
______________________________

           Net  rental income generated by the Company's  various
leased  departments  decreased by  $261,000,  or  6.2%,  to  $3.9
million  in  fiscal  2000 as compared to $4.2 million  in  fiscal
1999.  This decrease is primarily due to the termination  of  the
shoe department leases in 28 Gottschalks locations as of the  end
of  the first half of 1999. The Company assumed the operation  of
those shoe departments upon the termination of the lease and shoe
department sales in those locations beginning in the second  half
of  1999  are  included  in total sales for  financial  reporting
purposes. The decrease in net rental income was partially  offset
by  additional revenues generated by the leased shoe  departments
in 36 of the Company's new locations in the Pacific Northwest and
Alaska,  which have been operated by an independent lessee  since
being opened. The Company expects to terminate that lease at  the
end  of  July  2001 and assume the operation of those departments
beginning August 2001.

           As required by SAB No. 101, leased department revenues
are  presented  net of the related costs for financial  reporting
purposes.  Sales  generated by the Company's leased  departments,
consisting  primarily of the shoe departments  (currently  in  36
Pacific   Northwest   and   Alaskan  locations),   fine   jewelry
departments  and  the  beauty salons, totaled  $27.7  million  in
fiscal 2000 and $29.0 million in fiscal 1999.

Cost of Sales
_____________

          Cost of sales, which includes costs associated with the
buying,  handling and distribution of merchandise,  increased  by
approximately $79.7 million to $433.7 million in fiscal  2000  as
compared to $354.0 million in fiscal 1999, an increase of  22.5%.
This  increase is due to the increase in the Company's net sales.
The  Company's  gross  margin percentage increased  to  34.7%  in
fiscal 2000 as compared to 34.6% in fiscal 1999.

Selling, General and Administrative Expenses
____________________________________________

           Selling, general and administrative expenses increased
by  approximately $34.2 million to $201.8 million in fiscal  2000
as  compared  to  $167.6 million in fiscal 1999, an  increase  of
20.4%.   As  a  percent  of  net  sales,  selling,  general   and
administrative  expenses decreased to 30.4%  in  fiscal  2000  as
compared  to  31.0%  in  fiscal  1999.  The  dollar  increase  is
primarily  due  to operating costs associated  with  the  37  new
stores opened during the second half of fiscal 2000. The decrease
as  a percentage of net sales is primarily due to leveraging  the
Company's  fixed  costs and corporate overhead against  a  higher
sales base. This decrease was partially offset by higher costs as
a percentage of net sales incurred in the 37 new stores opened in
fiscal  2000,  which are currently being operated with  a  higher
payroll  and  advertising structure than the  Company's  existing
stores.  Such  expenditures  are  expected  to  decrease   as   a
percentage of net sales as the new stores mature.

           The Company expects to incur higher utilities costs in
fiscal  2001  as a result of the energy crisis in California  and
the  Pacific  Northwest. In an attempt to  partially  offset  the
impact  of  the expected rate increase, the Company is  currently
implementing   various   programs  aimed   at   reducing   energy
consumption at all facilities. The Company also expects to  incur
higher  health  care and workers' compensation  costs  in  fiscal
2001.  Programs  aimed  at reducing costs in  other  controllable
areas of the Company are also currently being developed.

Depreciation and Amortization
______________________________

           Depreciation and amortization expense, which  includes
the  amortization  of intangibles (goodwill and  favorable  lease
rights), increased by approximately $2.0 million to $11.5 million
in  fiscal  2000 as compared to $9.5 million in fiscal  1999,  an
increase  of  21.6%. As a percent of net sales, depreciation  and
amortization  expense remained unchanged at 1.7% in  fiscal  2000
and  1999.  The  dollar increase is primarily due  to  additional
depreciation  related  to assets acquired from  Lamonts,  capital
expenditures  for  new  stores and  the  renovation  of  existing
stores,  and information systems enhancements, both to  integrate
the newly acquired stores into the Company's existing systems and
for  other system enhancements. The dollar increase also  relates
to  goodwill and favorable lease rights recorded as a  result  of
the   Lamonts   acquisition.  Excluding   the   amortization   of
intangibles,  depreciation and amortization expense increased  by
$1.9  million, or 21.4%, as compared to the prior year, and as  a
percentage of net sales, remained unchanged at 1.6%.

New Store Pre-Opening Costs
_____________________________

           New  store  pre-opening costs, which are  expensed  as
incurred,  typically  include costs such as  payroll  and  fringe
benefits  for  store  associates,  store  rents,  grand   opening
advertising, credit solicitation and other costs incurred in  the
opening of a new store. As a result, the amount of new store pre-
opening  expenses recognized can vary significantly from year  to
year depending on the number of new stores opened.

           The Company recognized a total of $6.2 million of  new
store  pre-opening costs in fiscal 2000, including  $5.6  million
incurred  in  connection with the re-opening  of  the  34  stores
acquired  from  Lamonts. The Company also  incurred  $551,000  in
connection  with  the opening of the three new stores  in  Grants
Pass,  Oregon,  Walla Walla, Washington and Redding,  California.
New store pre-opening costs of $495,000 were recognized in fiscal
1999,  representing costs incurred in connection with the opening
of two new stores in Davis and Danville, California.

Asset Impairment Charge
_______________________

          The Company recognized a non-recurring asset impairment
charge  of  approximately $1.9 million in fiscal  1999  resulting
from  the write-off of an investment in a cooperative merchandise
buying group accounted for under the cost method.

Interest Expense
_________________

           Interest  expense, which includes the amortization  of
deferred financing costs, increased by approximately $2.3 million
to  $13.8 million in fiscal 2000 as compared to $11.4 million  in
fiscal  1999, an increase of 20.5%.  As a percent of  net  sales,
interest  expense remained unchanged at 2.1% in fiscal  2000  and
1999.  The  dollar  increase is primarily due to  higher  average
outstanding borrowings on the Company's working capital  facility
and  an increase in the weighted-average interest rate applicable
to the facility (8.76% in fiscal 2000 compared to 7.52% in fiscal
1999).  The  increase is also due to the issuance  of  the  $10.0
million  note payable in connection with the Lamonts  acquisition
(see Note 2 to the Consolidated Financial Statements).

           Interest expense related to securitized receivables is
reflected  as  a  reduction of net credit  revenues  and  is  not
included in interest expense for financial reporting purposes.

Miscellaneous Income
_____________________

           Miscellaneous income, which includes the  amortization
of  deferred  income and other miscellaneous income  and  expense
amounts,  decreased to approximately $1.4 million in fiscal  2000
as  compared to $1.6 million in fiscal 1999. As a percent of  net
sales,  miscellaneous income decreased to 0.2% in fiscal 2000  as
compared to 0.3% in fiscal 1999.

Income Taxes
_____________

           The  Company's effective tax rate was 38.2% in  fiscal
2000  as  compared to 39.0% in fiscal 1999. (See Note 10  to  the
Consolidated Financial Statements.)

Net Income
__________

           As a result of the foregoing, the Company reported net
income  of  $7.1 million, or $0.56 per share (basic and diluted),
in  fiscal  2000. This amount includes $5.6 million (pre-tax)  of
non-recurring costs incurred in connection with the re-opening of
the  34 stores acquired from Lamonts. Excluding such costs on  an
after-tax  basis,  net income for fiscal 2000 increased  by  $2.8
million, or $0.22 per share, to $10.6 million, or $0.84 per share
in  fiscal 2000, as compared to $7.8 million, or $0.62 per  share
(excluding the non-recurring item), in fiscal 1999.

Fiscal 1999 Compared to Fiscal 1998

Net Sales
__________

           Net sales increased by approximately $62.7 million, or
13.1%,  to  $541.3 million in fiscal 1999 as compared  to  $478.5
million  in  fiscal  1998.  This increase  is  primarily  due  to
additional  sales  volume  generated  by  the  eight  new  stores
acquired from Harris which were not open for the entire period in
the  prior  year,  and by two new stores opened in  Danville  and
Davis, California in October and November 1999, respectively. The
increase  is  also  due to a 7.7% increase  in  comparable  store
sales,  resulting  partially  from the  conversion  of  the  shoe
departments  in  28  stores  from leased  to  owned  departments,
effective  August  1,  1999.  Pursuant  to  SAB  No.  101,  sales
generated  in these shoe departments prior to the termination  of
the lease on August 1, 1999 are included in Net Leased Department
Revenues, as described below.

Net Credit Revenues
____________________

           Net  credit  revenues associated  with  the  Company's
private  label  credit  card  increased  by  approximately   $1.7
million, or 24.6%, in fiscal 1999 as compared to fiscal 1998.  As
a  percent of net sales, net credit revenues increased to 1.6% of
net  sales in fiscal 1999 as compared to 1.5% in fiscal 1998. Net
credit revenues consist of the following:

<TABLE>
<CAPTION>


(In thousands of dollars)                   1999          1998
____________________________________________________________________

<S>                                        <C>           <C>
Service charge revenues                    $15,618       $13,522
Interest expense on securitized
  receivables                               (4,069)       (3,314)
Charge-offs on receivables sold and
  provision for credit losses on
  receivables ineligible for sale           (3,013)       (3,175)
Gain (loss) on sale of receivables             173           (45)
                                            ------        ------
                                           $ 8,709       $ 6,988
                                            ======        ======

</TABLE>


          Service charge revenues increased by approximately $2.1
million,  or  15.5%, in fiscal 1999 as compared to  fiscal  1998.
This  increase  is  primarily due to  additional  service  charge
revenues  generated by customer credit card receivables  acquired
from  Harris, a change in the method of assessing service charges
to   an   average-daily  balance  method  effective  April   1999
(previously  assessed based on the balance as of  the  end  of  a
billing  period), and an increase in the volume  of  late  charge
fees  collected on delinquent credit card balances. The Company's
credit  sales as a percent of total sales increased to  44.2%  in
fiscal 1999 as compared to 43.1% in fiscal 1998.

           Interest  expense on securitized receivables increased
by $755,000, or 22.8%, in fiscal 1999 as compared to fiscal 1998.
This  increase is primarily due to a higher level of  outstanding
securitized borrowings during the period, combined with a  higher
weighted-average  interest  rate applicable  to  such  borrowings
(7.59%  in  fiscal  1999 as compared to 7.30%  in  fiscal  1998).
Charge-offs  on  receivables sold and the  provision  for  credit
losses  on receivables ineligible for sale decreased by $162,000,
or  5.1%, in fiscal 1999 as compared to 1998, primarily due to  a
favorable trend in credit losses during the period. As  a  result
of  an increase in the volume of receivables sold as compared  to
the  prior year, the gain (loss) on sale of receivables increased
by $218,000 in fiscal 1999 as compared to fiscal 1998.

Net Leased Department Revenues
________________________________

           Net  rental income generated by the Company's  various
leased  departments decreased by approximately $1.7  million,  or
29.2%, to $4.2 million in fiscal 1999 as compared to $5.9 million
in fiscal 1998. This decrease is primarily due to the termination
of  the  shoe  department leases in 28 store locations  effective
August  1,  1999. Shoe department sales in those locations  after
August  1,  1999  are  included  in  total  sales  for  financial
reporting purposes.

           Leased  department revenues are presented net  of  the
related  costs for financial reporting purposes. Sales  generated
by  the Company's leased departments, consisting primarily of the
shoe   departments  (prior  to  August  1,  1999),  fine  jewelry
departments  and  the  beauty salons, totaled  $29.0  million  in
fiscal 1999 and $40.2 million in fiscal 1998.

Cost of Sales
_____________

          Cost of sales, which includes costs associated with the
buying,  handling and distribution of merchandise,  increased  by
approximately $40.6 million to $354.0 million in fiscal  1999  as
compared to $313.4 million in fiscal 1998, an increase of  12.9%.
This  increase  is  due to the increase in sales.  The  Company's
gross  margin  percentage increased to 34.6% in  fiscal  1999  as
compared to 34.5% in fiscal 1998.

Selling, General and Administrative Expenses
____________________________________________

           Selling, general and administrative expenses increased
by  approximately $15.4 million to $167.6 million in fiscal  1999
as  compared  to  $152.2 million in fiscal 1998, an  increase  of
10.1%.   As  a  percent  of  net  sales,  selling,  general   and
administrative  expenses decreased to 31.0%  in  fiscal  1999  as
compared  to 31.8% in fiscal 1998, primarily due to higher  sales
volume  gained  through  the acquisition of  the  Harris  stores,
combined with on-going Company-wide cost reduction efforts.

Depreciation and Amortization
______________________________

           Depreciation  and  amortization expense  increased  by
approximately  $1.5 million to $9.5 million  in  fiscal  1998  as
compared  to $8.0 million in fiscal 1998, an increase  of  17.7%.
As a percent of net sales, depreciation and amortization remained
unchanged  at  1.7% in fiscal 1999 and fiscal  1998.  The  dollar
increase  is primarily due to additional depreciation related  to
assets  acquired  from  Harris and capital expenditures  for  the
renovation of existing stores, and a full year of amortization of
Harris goodwill.

New Store Pre-Opening Costs
____________________________

          New store pre-opening costs of $495,000 were recognized
in  fiscal  1999, representing costs incurred in connection  with
the  opening of two new stores in Danville and Davis, California.
New  store  pre-opening costs incurred in fiscal  1998,  totaling
$421,000, represents the amortization of costs arising  from  two
new store openings in fiscal 1997.

Non-Recurring Items
____________________

          The Company recognized a non-recurring asset impairment
charge  of  approximately $1.9 million in fiscal  1999  resulting
from  the write-off of an investment in a cooperative merchandise
buying group accounted for under the cost method.

            Fiscal   1998  results  include  acquisition  related
expenses  of  $859,000, consisting primarily  of  costs  incurred
prior  to  the elimination of duplicative operations  of  Harris,
including  merchandising, advertising,  credit  and  distribution
functions.  By the end of fiscal 1998, all duplicative operations
of Harris had been eliminated.


Interest Expense
_________________

           Interest  expense, which includes the amortization  of
deferred financing costs, increased by approximately $1.9 million
to  $11.4  million in fiscal 1999 as compared to $9.5 million  in
fiscal  1998, an increase of 20.5%.  As a percent of  net  sales,
interest expense increased to 2.1% in fiscal 1999 as compared  to
2.0%  in  fiscal  1998.  These increases  are  primarily  due  to
additional interest associated with the Subordinated Note  issued
to  Harris (see Note 8 to the Consolidated Financial Statements),
combined  with  higher average outstanding borrowings  under  the
Company's  working  capital  facility,  which  were  required  to
facilitate increased inventory purchases for new stores  and  for
the  newly owned shoe departments. These increases were partially
offset  by  a  decrease  in  the weighted-average  interest  rate
applicable to outstanding borrowings under the Company's  working
capital  facility (7.52% in fiscal 1999 as compared to  7.88%  in
fiscal  1998),  resulting primarily from  a  1/4%  interest  rate
reduction effective March 1999.

Miscellaneous Income
______________________

           Miscellaneous income, which includes the  amortization
of  deferred  income and other miscellaneous income  and  expense
amounts,  decreased by approximately $400,000 to $1.6 million  in
fiscal  1999  as  compared  to  $2.0  million  in  fiscal   1998.
Miscellaneous  income  in  fiscal  1998  includes  a  credit   of
approximately $350,000 to standardize the amortization periods of
certain donated properties.

Income Taxes
_____________

           The Company's effective tax rate decreased to 39.0% in
fiscal 1999 as compared to 41.5% in fiscal 1998, primarily due to
the  implementation of tax planning strategies. (See Note  10  to
the Consolidated Financial Statements.)

Net Income
____________

           As a result of the foregoing, the Company's net income
increased by approximately $1.3 million to $6.6 million in fiscal
1999  as compared to $5.3 million in fiscal 1998. On a per  share
basis  (basic  and diluted), net income increased  to  $0.53  per
share  in  fiscal 1999 as compared to $0.46 per share  in  fiscal
1998.  Excluding  the  previously described  non-recurring  asset
impairment  charge, net income for fiscal 1999 was $7.8  million,
or $0.62 per share.

Liquidity and Capital Resources
_________________________________

            In   fiscal  2000,  the  Company's  working   capital
requirements  were met through a combination of borrowings  under
its  revolving  line of credit, short-term trade credit,  and  by
sales  of  proprietary credit card accounts under its receivables
securitization    program.   Working   capital    increased    by
approximately $10.4 million to $115.1 million in fiscal  2000  as
compared to $104.7 million in fiscal 1999. The Company's ratio of
current assets to current liabilities decreased to 1.93:1  as  of
the  end  of fiscal 2000 as compared to 2.38:1 as of the  end  of
fiscal 1999.

           As described more fully below, the Company acquired 34
stores  from  Lamonts  in fiscal 2000 and  capital  requirements,
costs  associated with opening the stores and lower than expected
operating results generated by those stores reduced the Company's
liquidity position as of the end of fiscal 2000.

           Acquisition  of 34 Stores from Lamonts.  As  described
more fully in Note 2 to the Consolidated Financial Statements, on
July  24,  2000,  the  Company acquired 34 former  Lamonts  store
leases,  related  store  fixtures and equipment,  and  one  store
building  for a net purchase price of $17.6 million in cash.  The
acquisition significantly expanded the Company's presence in  the
Pacific Northwest and Alaska. A portion of the purchase price for
the  assets was financed through the issuance of a $10.0  million
three-year  note  payable to a third party  lender.  The  Company
financed  the  remainder  of  the purchase  price  from  existing
financial  resources.  The  Company incurred  approximately  $5.6
million  of non-recurring costs in connection with the re-opening
of  the  former  Lamonts stores. The Company also  experienced  a
significant  outflow  of cash to purchase an  adequate  level  of
merchandise  to open the stores, to refurbish the stores  and  to
integrate  the  stores  into the Company's  existing  information
systems. In addition to the cash required to acquire and open the
stores,  operating  results produced by those  stores  for  their
first  five  months of operation were lower than expected.  These
factors  contributed  to the $36.3 million  operating  cash  flow
deficit in fiscal 2000.

           Management believes that the cash required to  operate
and  maintain  an  optimal level of merchandise in  the  acquired
stores  in  fiscal  2001  will be significantly  less  than  that
required   to  initially  open  those  stores  in  fiscal   2000.
Management  has  also  implemented various initiatives  aimed  at
improving sales, profitability and cash flows generated by  those
stores.  Such  initiatives  include,  but  are  not  limited  to,
revising  the  merchandise mix in the  stores  based  on  current
selling   trends,  improving  the  effectiveness  of  advertising
expenditures,   improving  sales  associate   productivity,   and
reducing  staffing  levels  and  other  operating  costs,   where
appropriate. In addition, the Company is evaluating the  possible
sale  or  closure  of  five  to seven of  the  stores  which  are
currently   considered   to   be   either   underperforming,   or
inconsistent  with  the  long-term  operating  strategy  of   the
Company,  due  to  their  small size,  low  sales  volume  and/or
location.  The  Company is also evaluating the possible  mortgage
financing  of  the building acquired in the Lamonts  transaction.
Although management believes that these initiatives will  improve
the Company's liquidity position in fiscal 2001, there can be  no
assurance that the Company will integrate the Lamonts stores into
its operations successfully and improve their profitability.

Sources of Liquidity.
______________________

          Revolving  Line of Credit.   The Company has  a  $180.0
million revolving line of credit facility with Congress Financial
Corporation  (Western) through March 31, 2002.  Borrowings  under
the  arrangement are limited to a restrictive borrowing base that
is  generally  equal to 75% of eligible merchandise  inventories,
and at the Company's option, such borrowings may be increased  to
80%  of  such inventories during the period of November 1 through
December  31  of each year, to fund increased seasonal  inventory
requirements. During the period of March 1, 2000 through February
28,  2001,  interest on outstanding borrowings was charged  at  a
rate  of  LIBOR plus 1.875% (7.9% at February 3, 2001),  with  no
interest charged on the unused portion of the line of credit. The
interest rate was increased to LIBOR plus 2.00% on March 1, 2001.
The  Company had $18.3 million of excess availability  under  the
credit  facility  as of February 3, 2001, and was  in  compliance
with  the  single  financial  loan  covenant  applicable  to  the
facility.

           Receivables Securitization Program.  As described more
fully  in  Note  3 to the Consolidated Financial Statements,  the
Company  sells all of its accounts receivable arising  under  its
private-label   credit  cards  on  an  ongoing  basis   under   a
receivables  securitization facility. The facility  provides  the
Company  with an additional source of working capital  and  long-
term   financing  that  is  generally  more  cost-effective  than
traditional debt financing.

           On  March 1, 1999, the Company issued a $53.0  million
principal   amount  7.66%  Fixed  Base  Class  A-1  Credit   Card
Certificate (the "1999-1 Series") to a single investor through  a
private  placement.  Proceeds from the  issuance  of  the  1999-1
Series  were used to repay the outstanding balances of previously
issued certificates, totaling $26.9 million as of that date,  and
the  remaining funds were used to purchase additional receivables
from  the  Company.  The holder of the 1999-1 Series  certificate
earns  interest  on a monthly basis at a fixed interest  rate  of
7.66%,  and the outstanding principal balance of the certificate,
which  is off-balance sheet for financial reporting purposes,  is
to  be  repaid  in  twelve equal monthly installments  commencing
September 2003 and continuing through August 2004.

     On  November 16, 2000, a Variable Base Class A-1 Credit Card
Certificate  (the  "2000-1  Series")  was  also  issued  in   the
principal  amount of up to $24.0 million. The 2000-1  Series  was
issued  to  provide financing for receivables  in  the  Company's
portfolio  in  excess of amounts required to support  the  1999-1
Series,  and  for  the  additional  receivables  expected  to  be
generated  by  the  37 new stores opened in the  second  half  of
fiscal  2000.  The Company can borrow against the  2000-1  Series
certificate on a revolving basis, similar to a revolving line  of
credit  arrangement. Such borrowings are limited to  a  specified
percentage  of the outstanding balance of receivables  underlying
the  certificate.  The  holder of the 2000-1  Series  certificate
earns interest on a monthly basis at a variable rate equal to one-
month LIBOR plus 1.5% (7.38% at February 3, 2001). As of February
3,  2001,  $18.0 million was issued and outstanding  against  the
certificate,   which  was  the  maximum  amount   available   for
borrowings  as  of that date. The 2000-1 Series  certificate  was
issued for an initial 364-day commitment period (expiring October
31, 2001), and may be extended for subsequent 364-day periods  at
the  option of GCC Trust and the certificate holder, through July
31,  2003.  The outstanding principal balance of the certificate,
which  is  treated  as off-balance sheet for financial  reporting
purposes,  is  to  be  repaid in six equal  monthly  installments
commencing  in  the  month following the end  of  the  commitment
period.  In  the event the commitment period is extended  through
July  31,  2003,  the principal is to be repaid in  twelve  equal
monthly  installments commencing September  2003  and  continuing
through August 2004. Management presently expects to reissue  the
certificate for an additional 364-day period upon its  expiration
on October 31, 2001.

     Monthly  cash flows generated by the Company's  credit  card
portfolio, consisting of principal and interest collections,  are
first used to pay certain costs of the program, which include the
payment  of  principal  (when  required)  and  interest  to   the
investor,  and monthly servicing fees to the Company. Any  excess
cash  flows  are then available to fund additional  purchases  of
newly  generated receivables, ultimately serving as a  source  of
working  capital  financing for the Company. Subject  to  certain
conditions, the Company may expand the securitization program  to
meet future receivables growth.

Uses of Liquidity.
_____________________

            Capital  expenditures in  fiscal  2000,
totaling   $25.7  million,  were  primarily  related  to   tenant
improvements and fixtures and equipment for the 37 new department
stores opened during the year, the renovation and refixturing  of
certain  existing locations, and for various information  systems
enhancements,  including those required to  integrate  the  newly
acquired stores into the Company's existing systems. The  Company
presently  has  no commitments to open or remodel any  stores  in
fiscal  2001.  Management has the ability to  limit  or  delay  a
significant percentage of its current fiscal 2001 planned capital
expenditures without adversely affecting the Company's  business,
its financial condition or its results of operations.

          As  described  more fully in Note 8 to the Consolidated
Financial   Statements,   the   Company   has   other   long-term
obligations,  including  capital lease  obligations,  with  total
outstanding balances of $39.5 million at February 3, 2001  ($35.2
million as of January 29, 2000). The obligations mature at  dates
ranging  from  2001 to 2010, bear interest at fixed and  variable
rates  ranging  from 8.63% to 10.45%, and are  collateralized  by
various  properties and equipment of the Company.  The  scheduled
annual  principal  maturities on the Company's various  long-term
obligations  are  $5.8  million,  $4.8  million,  $3.4   million,
$906,000  and $660,000 for fiscal 2001 through 2005,  with  $18.1
million  due thereafter. In addition, in fiscal 1998 the  Company
issued  a  $22.2 million 8% Subordinated Note in connection  with
the  Harris acquisition. The Subordinated Note is due August  20,
2003,   but  may  be  extended  to  August  2006  under   certain
circumstances.  (See Notes 7 and 8 to the Consolidated  Financial
Statements.)

           Certain  of  the Company's long-term  debt  and  lease
arrangements contain various restrictive financial covenants. The
Company  was  in  compliance with all such restrictive  financial
covenants as of February 3, 2001.

          Management believes the previously described sources of
liquidity,   including,  without  limitation,   the   anticipated
proceeds from the proposed sale or mortgage financing of  certain
of  the  stores  acquired  in the Lamonts  transaction,  will  be
adequate   to   meet  the  Company's  working  capital,   capital
expenditure and debt service requirements for fiscal 2001.

Inflation
_________

           Although  inflation has not been a material factor  in
the  Company's  operations during the  past  several  years,  the
Company has experienced increases in the costs of certain of  its
merchandise,  salaries, employee benefits and other  general  and
administrative   costs,  including  health  care   and   workers'
compensation costs. The Company is generally able to offset these
increases  by  adjusting its selling prices or by  modifying  its
operations.  The  Company's ability to adjust selling  prices  is
limited by competitive pressures in its market areas.

          The Company accounts for its merchandise inventories on
the retail method using last-in, first-out (LIFO) cost based upon
the  department store price indices published by  the  Bureau  of
Labor  Statistics.  Under this method, the cost of products  sold
reported  in the financial statements approximates current  costs
and  thus reduces the impact of inflation due to increasing costs
on reported income.

Seasonality
_____________

          The Company's business, like that of most retailers, is
subject  to  seasonal influences, with the major portion  of  net
sales,  gross  profit and operating results realized  during  the
Christmas  selling months of November and December of each  year,
and  to  a  lesser  extent, during the Easter and  Back-to-School
selling seasons. The Company's results may also vary from quarter
to  quarter  as a result of, among other things, the  timing  and
level  of the Company's sales promotions, weather, fashion trends
and the overall health of the economy, both nationally and in the
Company's   market  areas.  Working  capital  requirements   also
fluctuate during the year, increasing substantially prior to  the
Christmas   selling   season  when   the   Company   must   carry
significantly higher inventory levels.

          The  following  table sets forth  unaudited  quarterly
results  of  operations for fiscal 2000 and 1999  (in  thousands,
except  per  share  data).  (See  Note  15  to  the  Consolidated
Financial Statements.)

<TABLE>
<CAPTION>


                                              2000
                          _____________________________________________
Quarter Ended             April 29  July 29   October 28    February 3
-------------             --------  -------   ----------    ----------

<S>                       <C>        <C>         <C>        <C>
Net sales (1)             $121,335   $129,939    $153,694   $258,900
Gross profit                41,034     45,067      57,316     86,727
Income (loss) before
  income tax expense
  (benefit) (2)             (1,390)        17      (4,086)    16,912
Net income (loss)           (  841)        11      (2,472)    10,381
Net income (loss)
  per common share -
    basic and diluted     $  (0.07)  $  (0.00)   $  (0.20)   $  0.83
Weighted-average
  number of common
  shares outstanding:
    Basic                   12,597     12,605      12,621     12,582
    Diluted                 12,597     12,629      12,621     12,616



                                              1999
                            ___________________________________________
Quarter Ended               May 1    July 31    October 30  January 29
-------------               -----    -------    ----------  ----------

<S>                       <C>        <C>         <C>        <C>
Net sales (1)             $111,502   $119,209    $123,330   $187,234
Gross profit                37,930     41,351      44,366     63,618
Income (loss) before
  income tax expense
  (benefit)(3)              (1,851)   (   180)        615     12,292
Net income (loss)           (1,079)   (   105)        358      7,462
Net income (loss)
  per common share -
    basic and diluted     $  (0.09)  $  (0.01)   $   0.03   $   0.59
Weighted-average
  number of common
  shares outstanding:
    Basic                   12,575     12,575      12,575     12,581
    Diluted                 12,575     12,575      12,646     12,615


</TABLE>

(1)  The  Company's net sales by quarter in both fiscal 2000  and
     1999  have  been increased to include shipping and  handling
     fees charged to customers, in accordance with EITF No. 00-10
     (see  "Recently  Issued Accounting Standards"  below).  Such
     amounts  were  previously credited to selling,  general  and
     administrative costs.

(2)  Income (loss) before income tax expense (benefit)  in  the
     three month periods ended July 29, 2000 and October 28, 2000
     include non-recurring, pre-tax charges for costs incurred in
     the  re-opening  of  the  34 stores  acquired  from  Lamonts
     totaling $977,000 and $4,655,000, respectively. The total of
     such costs recognized in fiscal 2000 amounted to $5,632,000.

(3)  Income  (loss)  before income tax expense (benefit)  in  the
     three  month period ended January 29, 2000 includes  a  non-
     recurring,  pre-tax  charge for $1,933,000  to  reflect  the
     impairment  of  an investment accounted for under  the  cost
     method.

Recently Issued Accounting Standards
____________________________________

SFAS  No. 133, "Accounting for Derivative Instruments and Hedging
Activities,"  is  effective for all fiscal years beginning  after
June  15,  2000. SFAS No. 133, as amended, establishes accounting
and  reporting  standards for derivative  instruments,  including
certain  derivative instruments embedded in other  contracts  and
for  hedging  activities. Under SFAS 133, certain contracts  that
were  not  formerly  considered  derivatives  may  now  meet  the
definition of a derivative. The Company will adopt SFAS  No.  133
effective as of the beginning of fiscal 2001. Management does not
expect its adoption to have a significant impact on the financial
position, results of operations, or cash flows of the Company.

SFAS  No.  140,  "Accounting  for  Transfers  and  Servicing   of
Financial Assets and Extinguishments of Liabilities," was  issued
in  September  2000 and replaces SFAS No. 125. SFAS  No.  140  is
effective  for  transfers and servicing of financial  assets  and
extinguishments  of liabilities occurring after March  31,  2001,
with  certain disclosure requirements effective for fiscal  years
ending after December 15, 2000 (fiscal 2000 for the Company). The
statement  carries over most of the provisions of  SFAS  No.  125
without  reconsideration and, accordingly, the adoption  of  SFAS
No.  140  is  not  expected to materially  affect  the  Company's
financial position or the results of its operations. The  Company
adopted the disclosure provisions of SFAS No. 140 for its  fiscal
2000 financial statements.

Effective  as of the end of fiscal 2000, the Company adopted  the
provisions  of Emerging Issues Task Force ("EITF")  Issue  00-10,
"Accounting  for  Shipping and Handling Fees  and  Costs,"  which
requires  that  all  amounts billed  to  a  customer  in  a  sale
transaction   for  shipping  and  handling,  including   customer
delivery  charges, be classified as revenue, and that  all  prior
periods  presented be reclassified to conform with  the  required
presentation.  The Company had previously included  shipping  and
handling   revenues  and  costs  in  its  selling,  general   and
administrative costs.

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
          RISK

           The  Company is exposed to market risks in the  normal
course of business due to changes in interest rates on short-term
borrowings under its revolving line of credit, the Series  2000-1
certificate  and on one of its long-term borrowing  arrangements.
As of February 3, 2001, borrowings subject to a variable interest
rate   represented  57.0%  of  the  Company's  total  outstanding
borrowings (both on and off-balance sheet). The Company does  not
engage  in  financial  transactions for  speculative  or  trading
purposes,  nor  does the Company purchase or hold any  derivative
financial instruments.

          The interest payable on the Company's revolving line of
credit,  2000-1  Series  certificate and  one  of  its  long-term
borrowing arrangements, are based on variable interest rates  and
are  therefore affected by changes in market interest  rates.  An
increase  of 88 basis points on existing floating rate borrowings
(a  10% change from the Company's weighted-average interest  rate
as  of  February 3, 2001) would reduce the Company's pre-tax  net
income  and  cash flow by approximately $869,000. This  88  basis
point increase in interest rates would not materially affect  the
fair  value  of  the Company's fixed rate financial  instruments.
(See Note 1 to the Consolidated Financial Statements.)

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The response to this item is set forth under Part IV,
Item 14, included elsewhere herein.


Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

         None.


                          PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

          The information required by Item 10 of Form 10-K, other
than  the following information required by Paragraph (b) of Item
401  of  Regulation S-K, is incorporated by reference from  those
portions of the Company's definitive proxy statement with respect
to  the Annual Stockholders' Meeting scheduled to be held on June
28,  2001,  to  be filed pursuant to Regulation  14A  (the  "2001
Proxy")  under the headings "Nominees for Election  as  Director"
and "Section 16(a) Beneficial Ownership Reporting Compliance."

          As  of  March 31, 2001, the name, age and title of  the
senior executive officers of the Company are as follows:

Name                   Age(1)         Position
----                   ------         --------
James R. Famalette     49             President and Chief
                                      Executive Officer

Gary L. Gladding       61             Executive Vice President/
                                      General Merchandise Manager

Michael S. Geele       50             Senior Vice President and
                                      Chief Financial Officer

Michael J. Schmidt     59             Senior Vice President/
                                      Director of Stores

David K. Vernon        45             Senior Vice
                                      President/General Merchandise
                                      Manager - Home and Merchandise
                                      Planning

          James R. Famalette became President and Chief Executive
Officer  of  the  Company  on  June 25,  1999  after  serving  as
President and Chief Operating Officer of the Company since  April
14,  1997.  Prior  to  joining  the Company,  Mr.  Famalette  was
President  and  Chief  Executive  Officer  of  Liberty  House,  a
department  and specialty store chain based in Honolulu,  Hawaii,
from  1993  through  1997,  and served  in  a  variety  of  other
positions  with  Liberty House from 1987 through 1993,  including
Vice  President,  Stores and Vice President, General  Merchandise
Manager.   From  1982 through 1987, he served as Vice  President,
General  Merchandise  Manager and later as President  of  Village
Fashions/Cameo  Stores  in Philadelphia, Pennsylvania,  and  from
1975  to  1982  served  as a Divisional Merchandise  Manager  for
Colonies,   a   specialty  store  chain,  based   in   Allentown,
Pennsylvania. Mr. Famalette serves on the Board of  Directors  of
the National Retail Federation.

          Gary  L. Gladding has been Executive Vice President  of
the   Company  since  1987,  and  joined  the  Company  as   Vice
President/General Merchandise Manager in 1983 (1). Prior to 1983,
he  served  in  a  variety of management positions  with  Lazarus
Department  Stores,  a division of Federated  Department  Stores,
Inc., and the May Department Stores Co.

          Michael S. Geele became Senior Vice President and Chief
Financial  Officer of the Company on January 21, 1999.  Prior  to
joining  the  Company, Mr. Geele was Chief Financial  Officer  of
Southwest  Supermarkets in Phoenix, Arizona from  1995  to  1998.
From  1991 to 1995, Mr. Geele served as Vice President of Finance
for  Smitty's  Super Valu in Phoenix, Arizona, and from  1981  to
1991   served  in  various  financial  positions  with  Smitty's,
including Senior Director and Corporate Controller. Mr. Geele  is
a Certified Public Accountant.

          Michael     J.     Schmidt    became    Senior     Vice
President/Director of Stores of the Company in 1985(1). From 1983
through  1985,  he  was Manager of the Gottschalks  Fashion  Fair
store. Prior to joining the Company, he held management positions
with Liberty House, Allied Corporation and R.H. Macy & Co., Inc.

          David  K.  Vernon  became Senior Vice President/General
Merchandise  Manager  - Home and Merchandise  Planning  in  1999,
after  serving  as Vice President/General Merchandise  Manager  -
Home  since  1996. From 1993 to 1996, he was the Divisional  Vice
President  of Broadway Department Stores, and prior to that  held
senior   merchandising  manager  positions  with  various   other
department stores, including Macy's, Rich's and Bullocks.


           (1)   References to the Company prior to 1986 are more
specifically to the Company's predecessor and former  subsidiary,
E. Gottschalk and Co., Inc.

Item 11.  EXECUTIVE COMPENSATION

          The  information required by this item is  incorporated
by  reference  from  those portions of the Company's  2001  Proxy
under   the   headings  "Executive  Compensation"  and  "Director
Compensation For Fiscal Year 2000."

Item  12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL  OWNERS  AND
          MANAGEMENT

          The  information required by this item is  incorporated
by  reference from the portion of the Company's 2001 Proxy  under
the  heading "Security Ownership of Certain Beneficial Owners and
Management."

Item  13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          The  information required by this item is  incorporated
by  reference from the portion of the Company's 2001 Proxy  under
the heading "Certain Relationships and Related Transactions."


                               PART IV

Item  14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS  ON
          FORM 8-K

(a)(1)    The  following  consolidated  financial  statements  of
          Gottschalks Inc. and Subsidiary as required by  Item  8
          are included in this Part IV, Item 14:

          Consolidated  balance sheets - As of February  3,  2001
          and January 29, 2000

          Consolidated  income statements -- Fiscal  years  ended
          February 3, 2001, January 29, 2000 and January 30, 1999

          Consolidated  statements  of  stockholders'  equity  --
          Fiscal  years ended February 3, 2001, January 29,  2000
          and January 30, 1999

          Consolidated  statements of cash flows -- Fiscal  years
          ended  February 3, 2001, January 29, 2000  and  January
          30, 1999

          Notes  to  consolidated financial statements  --  Three
          years ended February 3, 2001

          Independent auditors' report

(a)(2)    The   following   financial   statement   schedule   of
          Gottschalks  Inc.  and Subsidiary is included  in  Item
          14(d):

          Schedule II -- Valuation and qualifying accounts

           All other schedules for which provision is made in the
applicable accounting regulations of the Securities and  Exchange
Commission are included in the consolidated financial statements,
are   not  required  under  the  related  instructions   or   are
inapplicable, and therefore have been omitted.


(a)(3)    The  following  exhibits are required by  Item  601  of
          Regulation S-K and Item 14(c):

                                               Incorporated by
                                               Reference From
                                                   the
Exhibit                                          Following
  No.     Description                            Document
-------   -------------------------------      ------------------

3.1       Certificate of Incorporation         Registration
          of the Registrant, as amended        Statement on Form
                                               S-1 (File No. 33-3949)

3.2       By-Laws of the Registrant,           Filed electronically
                                               herewith

10.1      Agreement of Limited Partnership     Annual Report on
          dated March 16, 1990, by and         Form 10-K for the
          between River Park Properties I      year ended February
          and Gottschalks Inc. relating to     2, 1991 (File No.
          the Company's corporate              1-09100)
          headquarters

10.2      Gottschalks Inc. Retirement           Registration
          Savings Plan(*)                       Statement on Form
                                                S-1 (File No.
                                                33-3949)

10.3      Participation Agreement dated         Annual Report on
          as of December 1, 1988 among          Form 10-K for the
          Gottschalks Inc., General Foods       year ended January
          Credit Investors No. 2 Corporation    29, 1994 (File No.
          and Manufacturers Hanover Trust       1-09100)
          Company of California relating to
          the sale-leaseback of the Stockton
          and Bakersfield department stores
          and the Madera distribution facility

10.4      Lease Agreement dated December 1,     Annual Report on
          1988 by and between Manufacturers     Form 10-K for the
          Hanover Trust Company of California   year ended January
          and Gottschalks Inc. relating to      29, 1994 (File No.
          the sale-leaseback of department      1-09100)
          stores in Stockton and Bakersfield,
          California and the Madera
          distribution facility

10.5      Ground Lease dated December 1,        Annual Report on
          1988 by and between Gottschalks       Form 10-K for the
          Inc. and Manufacturers Hanover        year ended January
          Trust Company of California           29, 1994 (File No.
          relating to the sale-leaseback        1-09100)
          of the Bakersfield department store

10.6      Memorandum of Lease and Lease         Annual Report on
          Supplement dated July 1, 1989 by      Form 10-K for the
          and between Manufacturers Hanover     year ended January
          Trust Company of California and       29, 1994 (File No.
          Gottschalks Inc. relating to the      1-09100)
          sale-leaseback of the Stockton
          department store

10.7      Ground Lease dated August 17,         Annual Report on
          1989 by and between Gottschalks       Form 10-K for the
          Inc. and Manufacturers Hanover        year ended January
          Trust Company of California           29, 1994 (File No.
          relating to the sale-leaseback of     1-09100)
          the Madera distribution facility

10.8      Lease Supplement dated as of          Annual Report on
          August 17, 1989 by and between        Form 10-K for the
          Manufacturers Hanover Trust           year ended January
          Company of California and             29, 1994 (File No.
          Gottschalks Inc. relating to the      1-09100)
          sale-leaseback of the Madera
          distribution facility

10.9      Tax Indemnification Agreement         Annual Report on
          dated as of August 1, 1989 by         Form 10-K for the
          and between Gottschalks Inc.          year ended January
          and General Foods Credit              29, 1994 (File No.
          Investors No. 2 Corporation           1-09100)
          relating to the sale-leaseback
          of the Stockton and Bakersfield
          department stores and the
          Madera distribution facility

10.10     Lease Agreement dated as of           Annual Report on
          March 16, 1990 by and between         Form 10-K for the
          Gottschalks Inc. and River            year ended January
          Park Properties I relating to the     29, 1994 (File No.
          Company's corporate headquarters      1-09100)

10.11     Consulting Agreement dated            Quarterly Report on
          May 27, 1994 by and between           Form 10-Q for the
          Gottschalks Inc. and Gerald           quarter ended April
          H. Blum(*)                            30, 1994 (File No.
                                                1-09100)

10.12     Form of Severance Agreement           Annual Report on
          dated March 31, 1995 by and           Form 10-K for the
          between Gottschalks Inc. and          year ended January
          the following senior executives       28, 1995 (File No.
          of the Company: Joseph W. Levy,       1-09100)
          Gary L. Gladding and Michael
          J. Schmidt(*)

10.13     1994 Key Employee Incentive           Registration
          Stock Option Plan(*)                  Statement on Form
                                                S-8 (File #33-54789)

10.14     1994 Director Nonqualified            Registration
          Stock Option Plan(*)                  Statement on Form
                                                S-8 (File #33-54783)

10.15     Promissory Note and Security          Annual Report on
          Agreement dated December 16,          Form 10-K for the
          1994 by and between                   year ended January
          Gottschalks Inc. and                  28, 1995 (File No.
          Heller Financial, Inc.                1-09100)

10.16     Agreement of Sale dated June 27,      Quarterly Report on
          1995, by and between Gottschalks      Form 10-Q for the
          Inc. and Jack Baskin relating to      quarter ended July
          the sale and leaseback of the         29, 1995 (File No.
          Capitola, California property         1-09100)

10.17     Lease and Agreement dated June 27,    Quarterly Report on
          1995, by and between Jack Baskin      Form 10-Q for the
          and Gottschalks Inc. relating to      quarter ended July
          the sale and leaseback of the         29, 1995 (File No.
          Capitola, California property         1-09100)

10.18     Promissory Notes and Security         Quarterly Report on
          Agreements dated October 4, 1995      Form 10-Q for the
          and October 10, 1995 by and           quarter ended
          between Gottschalks Inc. and          October 28, 1995
          Midland Commercial Funding            (File No. 1-09100)

10.19     Promissory Note and Security          Quarterly Report on
          Agreement dated October 2,            Form 10-Q for the
          1996, by and between Gottschalks      year ended November
          Inc. and Heller Financial, Inc.       2, 1996 (File No.
                                                1-09100)

10.20     Loan and Security Agreement dated     Annual Report on
          December 29, 1996, by and between     Form 10-K for the
          Gottschalks Inc. and Congress         year ended February
          Financial Corporation                 1, 1997 (File No.
                                                1-09100)

10.21     Gottschalks Inc. 1998 Stock           Registration
          Option Plan(*)                        Statement on Form
                                                S-8 (File #33-61471)

10.22     Gottschalks Inc. 1998                 Registration
          Employee Stock Purchase               Statement on Form
          Plan(*)                               S-8 (File #33-61473)

10.23     Asset Purchase Agreement dated        Current Report on
          as of July 21, 1998 among             Form 8-K dated July
          Gottschalks Inc., The Harris          21, 1998 (File No.
          Company and El Corte Ingles,          1-09100)
          S. A. together with all
          Exhibits thereto

10.24     Non-Negotiable, Extendable,           Current Report on
          Subordinated Note due                 Form 8-K dated
          August 20, 2003 issued to             August 20, 1998
          The Harris Company                    (File No. 1-09100)

10.25     Registration Rights Agreement         Current Report on
          between The Harris Company and        Form 8-K dated
          Gottschalks Inc. dated                August 20, 1998
          August 20, 1998                       (File No. 1-09100)

10.26     Tradename License Agreement           Current Report on
          between The Harris Company and        Form 8-K dated
          Gottschalks Inc. dated                August 20, 1998
          August 20, 1998                       (File No. 1-09100)

10.27     Stockholders' Agreement among         Current Report on
          El Corte Ingles, S. A., Gottschalks   Form 8-K dated
          Inc., Joseph Levy and Bret Levy       August 20, 1998
          dated August 20, 1998                 (File No. 1-09100)

10.28     Standstill Agreement between          Current Report on
          El Corte Ingles, S. A., and           Form 8-K dated
          Gottschalks Inc. dated                August 20, 1998
          August 20, 1998                       (File No. 1-09100)

10.29     Store Lease Agreement between         Current Report on
          El Corte Ingles, S. A., and           Form 8-K dated
          Gottschalks Inc. dated                August 20, 1998
          August 20, 1998 re: East Hills        (File No. 1-09100)
          Mall, Bakersfield, California

10.30     Store Lease Agreement between         Current Report on
          El Corte Ingles, S. A., and           Form 8-K dated
          Gottschalks Inc. dated                August 20, 1998
          August 20, 1998 re: Moreno            (File No. 1-09100)
          Valley Mall at Towngate,
          Moreno Valley, California

10.31     Store Lease Agreement between         Current Report on
          El Corte Ingles, S. A., and           Form 8-K dated
          Gottschalks Inc. dated                August 20, 1998
          August 20, 1998 re: Antelope          (File No. 1-09100)
          Valley Mall at Palmdale, California

10.32     Form of Severance Agreement           Annual Report on
          dated January 21, 1999 by             Form 10-K for the
          and between Gottschalks Inc.          year ended January
          and Michael S. Geele (*)              30,1999 (File No.
                                                1-09100)

10.33     Receivables Purchase                  Annual Report on
          Agreement dated March 1, 1999         Form 10-K for the
          By and between Gottschalks            year ended January
          Credit Receivables Corporation        30, 1999 (File No.
          and Gottschalks Inc.                  1-09100)

10.34     Pooling and Servicing                 Annual Report on
          Agreement dated as of March 1,        Form 10-K for the
          1999 by and among Gottschalks         year ended January
          Credit Receivables Corporation,       30, 1999 (File No.
          Gottschalks Inc. and Bankers          1-09100)
          Trust Company

10.35     Series 1999-1 Supplement to           Annual Report on
          Pooling and Servicing                 Form 10-K for the
          Agreement dated March 1, 1999         year ended January
          by and among Gottschalks Credit       30, 1999 (File No.
          Receivables Corporation,              1-09100)
          Gottschalks Inc. and Bankers
          Trust Company

10.36     Sixth Amendment to Loan and           Quarterly Report on
          Security Agreement dated August       Form 10-Q for the
          12, 1999, by and between Gottschalks  quarter ended
          Inc. and Congress Financial           July 31, 1999 (File
          Corporation (Western).                No. 1-09100)

10.37     Employment Agreement dated June       Quarterly Report on
          25, 1999 by and between               Form 10-Q for the
          Gottschalks Inc. and James R.         quarter ended July
          Famalette(*).                         31, 1999 (File No.
                                                1-09100)

10.38     Seventh Amendment to Loan and         Annual Report on
          Security Agreement dated March        Form 10-K for the
          27, 2000, by and between              year ended January
          Gottschalks Inc. and Congress         29, 2000 (File No.
          Financial Corporation (Western).      1-09100)

10.41     Asset Purchase Agreement dated        Annual Report on
          April 24, 2000 by and between         Form 10-K for the
          Gottschalks Inc. and Lamonts          year ended January
          Apparel, Inc.                         29, 2000 (File No.
                                                1-09100)

10.42     Eighth Amendment to Loan and          Quarterly Report on
          Security Agreement dated              Form 10-Q for the
          May 19, 2000 by and between           quarter ended April
          Gottschalks Inc. and Congress         29, 2000 (File No.
          Financial Corporation (Western).      1-09100)

10.43     Ninth Amendment to Loan and           Quarterly Report on
          Security Agreement dated              Form 10-Q for the
          June 28, 2000 by and between          quarter ended July
          Gottschalks Inc. and Congress         29, 2000 (File No.
          Financial Corporation (Western).      1-09100)

10.44     Amendment No. 1 to the Asset          Quarterly Report on
          Purchase Agreement dated May          Form 10-Q for the
          16, 2000 by and between               quarter ended July
          Gottschalks Inc. and Lamonts          29, 2000 (File No.
          Apparel, Inc.                         1-09100)

10.45     Promissory Note dated July 24,        Quarterly Report on
          2000 by and between Gottschalks       Form 10-Q for the
          Inc. and Heller Financial             Quarter ended July
          Leasing, Inc.                         29, 2000 (File No.
                                                1-09100)

10.46     Series 2000-1 Supplement to the       Filed electronically
          Pooling and Servicing                 herewith
          Agreement dated as of November 16,
          2000 by and among Gottschalks
          Credit Receivables Corporation,
          Gottschalks Inc. and Bankers
          Trust Company

10.47     Amendment No. 1 to Pooling and        Filed electronically
          Servicing Agreement and the           herewith
          Series 1999-1 Supplement by
          and among Gottschalks Credit
          Receivables Corporation,
          Gottschalks Inc. and Bankers
          Trust Company

21.       Subsidiary of the Registrant         Annual Report on
                                               Form 10-K for the
                                               year ended January
                                               28, 1995 (File No.
                                               1-09100)

23.       Independent Auditors' Consent        Filed electronically
                                               herewith

(*)       Management contract, compensatory plan or arrangement.
________________________________________________________________


(b)            Reports  on Form 8-K -- The Company did  not  file
               any  Reports on Form 8-K during the fourth quarter
               of fiscal 2000.

(c)            Exhibits -- The response to this portion  of  Item
               14  is  submitted  as a separate section  of  this
               report.

(d)            Financial Statement Schedule--The response to this
               portion  of  Item 14 is submitted  as  a  separate
               section of this report.



























          ANNUAL REPORT ON FORM 10-K

     ITEM 8, 14(a)(1) and (2), (c) and (d)

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

               CERTAIN EXHIBITS

         FINANCIAL STATEMENT SCHEDULE

          YEAR ENDED FEBRUARY 3, 2001

        GOTTSCHALKS INC. AND SUBSIDIARY

              FRESNO, CALIFORNIA















INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
of Gottschalks Inc.
Fresno, California

We  have audited the accompanying consolidated balance sheets  of
Gottschalks Inc. and Subsidiary (the "Company") as of February 3,
2001   and   January  29,  2000,  and  the  related  consolidated
statements  of income, stockholders' equity, and cash  flows  for
each  of  the three years in the period ended February  3,  2001.
These   financial  statements  are  the  responsibility  of   the
Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We  conducted  our  audits in accordance with auditing  standards
generally  accepted  in  the  United  States  of  America.  Those
standards  require that we plan and perform the audit  to  obtain
reasonable  assurance about whether the financial statements  are
free of material misstatement. An audit includes examining, on  a
test  basis,  evidence supporting the amounts and disclosures  in
the  financial  statements. An audit also includes assessing  the
accounting  principles  used and significant  estimates  made  by
management, as well as evaluating the overall financial statement
presentation.  We  believe that our audits provide  a  reasonable
basis for our opinion.

In  our  opinion, such consolidated financial statements  present
fairly,  in  all  material respects, the  financial  position  of
Gottschalks  Inc. and Subsidiary at February 3, 2001 and  January
29,  2000,  and  the results of their operations and  their  cash
flows for each of the three years in the period ended February 3,
2001, in conformity with accounting principles generally accepted
in the United States of America.





/s/ Deloitte & Touche LLP
______________________________
Deloitte & Touche LLP
February 27, 2001





<TABLE>
<CAPTION>




GOTTSCHALKS INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands)
__________________________________________________________________________

                                             February 3,   January 29,
ASSETS                                          2001          2000
                                             -----------   -----------
CURRENT ASSETS:
  <S>                                          <C>          <C>
  Cash                                         $  2,827     $  1,901
  Retained interest in receivables sold          19,853       29,138
  Receivables - net                               8,840        7,597
  Merchandise inventories                       185,226      130,028
  Other                                          21,622       11,826
                                                -------      -------
    Total current assets                        238,368      180,490

PROPERTY AND EQUIPMENT - net                    143,670      120,393

OTHER ASSETS:
  Intangibles - net                              18,564        8,708
  Other                                           6,619        6,573
                                                -------      -------
                                                 25,183       15,281
                                                -------      -------
                                               $407,221     $316,164
                                                =======      =======

</TABLE>





See notes to consolidated financial statements.




<TABLE>
<CAPTION>

GOTTSCHALKS INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands)
______________________________________________________________________
                                            February 3,   January 29,
                                              2001           2000
                                            -----------   -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES:
  Trade accounts payable and accrued
    <S>                                       <C>           <C>
    expenses                                  $ 80,944      $ 61,136
  Revolving line of credit                      32,828         5,479
  Current portion of long-term obligations       6,537         4,479
  Deferred income taxes                          3,007         4,677
                                               -------       -------
    Total current liabilities                  123,316        75,771

LONG-TERM OBLIGATIONS, less current portion    113,012        80,674

OTHER LIABILITIES                               19,216        20,911

DEFERRED INCOME TAXES                           12,801         7,609

SUBORDINATED NOTE PAYABLE TO AFFILIATE - net    21,303        20,961

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, par value of $.10 per share;
   2,000,000 shares authorized; none issued
  Common stock, par value of $.01 per share;
   30,000,000 shares authorized; 12,656,769
   and 12,596,837 issued                           127           126
Additional paid-in capita                       71,015        70,760
Retained earnings                               46,431        39,352
                                               -------       -------
                                               117,573       110,238
                                               -------       -------
                                              $407,221      $316,164
                                               =======       =======


</TABLE>


See notes to consolidated financial statements.




<TABLE>
<CAPTION>

GOTTSCHALKS INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share data)
_______________________________________________________________________


                                          2000       1999      1998
                                        --------   --------  --------

<S>                                     <C>        <C>       <C>
Net sales                               $663,868   $541,275  $478,538
Net credit revenues                        9,150      8,709     6,988
Net leased department revenues             3,948      4,209     5,944
                                         -------    -------   -------
    Total revenues                       676,966    554,193   491,470
                                         -------    -------   -------
Costs and expenses:
  Cost of sales                          433,724    354,010   313,431
  Selling, general and
    administrative expenses              201,765    167,561   152,231
  Depreciation and amortization           11,505      9,465     8,040
  New store pre-opening costs              6,183        495       421
  Asset impairment charge                             1,933
  Acquisition related expenses                                    859
                                         -------    -------   -------
     Total costs and expenses            653,177    533,464   474,982
                                         -------    -------   -------

Operating income                          23,789     20,729    16,488

Other (income) expense:
  Interest expense                        13,750     11,408     9,470
  Miscellaneous income                    (1,414)    (1,555)   (2,011)
                                         -------    -------    ------
                                          12,336      9,853     7,459
                                         -------    -------    ------

Income before income tax expense          11,453     10,876     9,029

Income tax expense                         4,374      4,240     3,747
                                         -------    -------   -------

Net income                              $  7,079   $  6,636  $  5,282
                                         =======    =======   =======
Net income per common share -
  basic and diluted                     $   0.56   $   0.53  $   0.46
                                         =======    =======   =======




</TABLE>

See notes to consolidated financial statements.


<TABLE>
<CAPTION>


GOTTSCHALKS INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
_____________________________________________________________________________


                                                Additional
                                Common Stock      Paid-In    Retained
                             Shares     Amount    Capital    Earnings  Total
                             -----------------  ----------   --------  -----

<S>                         <C>          <C>      <C>         <C>      <C>
BALANCE, JANUARY 31, 1998   10,478,415   $105     $56,366     $27,434  $83,905
  Net income                                                    5,282    5,282
  Shares issued for
   business acquisition      2,095,900     21      14,252               14,273
Shares issued under
   stock option plan             1,250                  8                    8
                            ----------    ---      ------      ------  -------

BALANCE, JANUARY 30, 1999   12,575,565    126      70,626      32,716  103,468
  Net income                                                    6,636    6,636
  Shares issued under
   stock purchase plan          21,272                134                  134
                            ----------    ---      ------      ------  -------
BALANCE, JANUARY 29, 2000   12,596,837    126      70,760      39,352  110,238
  Net income                                                    7,079    7,079
  Shares issued under
   stock purchase plan         59,932       1         255                  256
                           ----------     ---      ------      ------  -------
BALANCE, FEBRUARY 3, 2001  12,656,769    $127     $71,015     $46,431 $117,573
                           ==========     ===      ======      ======  =======


</TABLE>



See notes to consolidated financial statements.

<TABLE>
<CAPTION>




GOTTSCHALKS INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
_____________________________________________________________________________

                                            2000        1999      1998
OPERATING ACTIVITIES:                     --------    -------    -------

<S>                                       <C>         <C>        <C>
Net income                                $  7,079    $ 6,636    $ 5,282
Adjustments:
  Depreciation and amortization             11,505      9,465      8,040
  Deferred income taxes                      3,522      3,562        633
  Amortization of deferred income and
    other deferred items                    (1,695)    (3,201)      (950)
  Provision for credit losses                1,025        982        992
  Net loss from sale of assets                 151         86         26
  Asset impairment charge                               1,933
  Other non-cash items, net                    (41)       343       (106)
Decrease (increase) in assets, excluding
  effect of business acquisition:
     Receivables                            (1,883)    (2,643)     (1,312)
     Merchandise inventories               (54,409)    (6,117)     (4,524)
     Other current and long-term assets    ( 9,977)     4,923       5,611
Increase (decrease) in liabilities, excluding
  effect of business acquisition:
     Trade accounts payable and accrued
       expenses                             13,748     (7,868)     (2,571)
     Other current and long-term
       liabilities                          (5,373)    (2,296)        373
         Net cash (used in) provided by    -------    -------     -------
           operating activities            (36,348)     5,805      11,494

INVESTING ACTIVITIES:
Available-for-sale securities:
  Maturities                              (330,131)  (305,926)   (262,357)
  Purchases                                321,416    304,795     256,571
Purchases of property and equipment        (25,704)   (16,059)    (16,801)
Acquisitions of assets and business        (19,522)                (1,369)
Proceeds from property and equipment
  sales and other                              194        317         878
        Net cash used in investing         -------    -------     -------
          activities                       (53,747)   (16,873)    (23,078)

FINANCING ACTIVITIES:
Net proceeds (repayments) under
   revolving line of credit                 57,349     (4,794)     29,506
Net proceeds from issuances of 2000-1
  and 1999-1 Series certificates            18,000     53,000
Principal payments on retired certificates            (30,900)    (15,800)
Proceeds from long-term obligations         10,000        500
Principal payments on long-term obligations (6,016)    (4,515)     (4,065)
Changes in cash management liability        11,433     (2,149)      2,035
Proceeds from sale of stock under employee
  stock purchase plan                          255        134
                                           -------    -------     -------
Net cash provided by financing activities   91,021     11,276      11,676
                                           -------    -------     -------
INCREASE IN CASH                               926        208          92

CASH AT BEGINNING OF YEAR                    1,901      1,693       1,601
                                           -------    -------     -------
CASH AT END OF YEAR                       $  2,827   $  1,901    $  1,693
                                           =======    =======     =======

SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:
INVESTING ACTIVITIES:
  Consideration for acquisition of business:
    Issuance of 2,095,900 shares of common stock                 $ 14,273
    Issuance of 8% Subordinated Note                               20,467
                                                                  -------
                                                                 $ 34,740
                                                                  =======
FINANCING ACTIVITIES:
  Acquisition of equipment under
    capital leases                       $    411    $    620    $  1,273
                                          =======     =======     =======

</TABLE>



See notes to consolidated financial statements.


GOTTSCHALKS INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
___________________________________________________________________________

1.   NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Gottschalks  Inc.  is a regional department and  specialty  store
chain  based in Fresno, California. As of February 3,  2001,  the
Company operated 79 full-line department stores located in  seven
Western  states,  with  39 stores located in  California,  21  in
Washington,  seven in Alaska, five in Idaho, four in Oregon,  two
in Nevada and one in Utah. The Company also operated 17 specialty
apparel stores which carry a limited selection of merchandise  as
of  that date. The Company's department stores typically offer  a
wide  range  of  better to moderate brand-name and  private-label
merchandise,  including men's, women's, junior's  and  children's
apparel, cosmetics, shoes and accessories, and also a wide  array
of  home  furnishings,  including domestics,  china,  housewares,
small   electrics  and,  in  certain  locations,  furniture   and
mattresses.

Use of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management  to  make estimates and assumptions  that  affect  the
reported  amounts of assets and liabilities at the  date  of  the
financial  statements and the reported amounts  of  revenues  and
expenses  during  the  reporting  periods.  Such  estimates   and
assumptions are subject to inherent uncertainties which may cause
actual results to differ from reported amounts.

Principles   of   Consolidation  -  The  accompanying   financial
statements  include  the accounts of Gottschalks  Inc.,  and  its
wholly-owned    subsidiary,   Gottschalks   Credit    Receivables
Corporation   ("GCRC"),  (collectively,   the   "Company").   All
significant  intercompany transactions  and  balances  have  been
eliminated in consolidation.

Fiscal  Year  -  The Company's fiscal year ends on  the  Saturday
nearest  January 31.  Fiscal years 2000, 1999 and 1998, ended  on
February  3,  2001,  January  29,  2000  and  January  30,  1999,
respectively. Fiscal 2000 included 53 weeks and fiscal  1999  and
1998 each included 52 weeks.

Revenue Recognition - Net retail sales are recorded at the point-
of-sale  and  include  sales  of merchandise,  net  of  estimated
returns and exclusive of sales tax. Net retail sales also include
all  amounts  billed  to  a customer in a  sale  transaction  for
shipping  and  handling,  including  customer  delivery  charges.
Revenues   on  special  order  sales  are  recognized  when   the
merchandise is delivered to the customer and has been paid for in
its entirety. The Company does not sell merchandise on layaway.

Net  leased  department revenues consist of  rental  income  from
lessees   and   sub-lessees.  Sales  generated  in  such   leased
departments  totaled $27,738,000, $29,029,000 and $40,216,000  in
2000, 1999 and 1998, respectively.

Transfers  and  Servicing  of  Financial  Assets  -  The  Company
currently  accounts  for  the transfer and  sale  of  receivables
pursuant  to its receivables securitization program in accordance
with  Statement  of Financial Accounting Standards  ("SFAS")  No.
125,  "Accounting for Transfers and Servicing of Financial Assets
and  Extinguishments of Liabilities" (see the following "Recently
Issued  Accounting Standards"). SFAS No. 125 requires the Company
to  recognize  gains and losses on transfers of financial  assets
(securitizations)  that  qualify as sales  and  to  recognize  as
assets certain financial components that are retained as a result
of  such  sales, which consist primarily of the retained interest
in  receivables  sold and the retained rights to future  interest
income  from  the serviced assets in excess of the  contractually
specified  servicing  fee (interest-only strips).  The  estimated
cost   to   service  the  assets  is  currently  equal   to   the
contractually specified servicing fee, resulting in no  servicing
assets or liabilities in 2000 or 1999.

The  retained interest in receivables sold is initially  recorded
at  the  date  of  the sale by allocating the  previous  carrying
amount  between the assets sold and the retained interests  based
on  their relative fair values. Any gain or loss on the  sale  is
dependent upon the allocation of the previous carrying amount  of
the   receivables  sold  to  the  retained  interests.   Retained
interests  are  subsequently carried at  fair  value,  which  are
estimated  based  upon the present value of the  expected  future
cash  flows, calculated using management's best estimates of  key
assumptions  about  anticipated credit losses, account  repayment
speeds,  discount rates and other factors necessary to derive  an
estimate of fair value.

The  certificated portion of the retained interest is  considered
readily  marketable  and is classified as  available-for-sale  in
accordance with SFAS No. 115, "Accounting for Certain Investments
in  Debt  and Equity Securities." Due to the short-term revolving
nature  of the credit card portfolio, the carrying value  of  the
Company's   retained  interest  approximates  its   fair   value,
resulting in no unrealized gains or losses.

Receivables  -  Receivables consist primarily of customer  credit
card   receivables   that   do  not  meet   certain   eligibility
requirements of the Company's receivables securitization  program
and  vendor claims (Note 3). The credit card receivables are  not
certificated  and  include revolving charge accounts  with  terms
which,  in some cases, provide for payments with terms in  excess
of  one  year.  In accordance with usual industry  practice  such
receivables are included in current assets.

The Company maintains reserves for possible credit losses on such
receivables which are based on their expected collectibility.

Concentrations  of Credit Risk -  The Company extends  credit  to
individual  customers  based  on  their  credit  worthiness   and
generally   requires   no   collateral   from   such   customers.
Concentrations  of  credit  risk with respect  to  the  Company's
credit  card receivables are limited due to the large  number  of
customers comprising the Company's customer base.

Merchandise   Inventories  -  Inventories,   which   consist   of
merchandise held for resale, are valued by the retail method  and
are  stated at last-in, first-out (LIFO) cost, which  is  not  in
excess  of  market. Current cost, which approximates  replacement
cost, under the first-in, first-out (FIFO) method is equal to the
LIFO  value  of inventories at February 3, 2001 and  January  29,
2000.

The  Company includes in inventory the capitalization of  certain
indirect  purchasing, merchandise handling and inventory  storage
costs to better match sales with these related costs.

New  Store  Pre-Opening Costs - New store pre-opening  costs  are
expensed as incurred and may vary significantly from year to year
depending on the number of new stores opened.

Property and Equipment - Property and equipment is stated on  the
basis  of cost or appraised value as to certain contributed land.
Depreciation  and  amortization is computed by the  straight-line
method  for financial reporting purposes over the shorter of  the
estimated  useful  lives of the assets or the lease  term,  which
range   from   20  to  40  years  for  buildings  and   leasehold
improvements  and  3  to  15 years for  furniture,  fixtures  and
equipment.  The  amortization of buildings  and  equipment  under
capital  leases is computed by the straight-line method over  the
term  of  the lease or the estimated economic life of the  asset,
depending  on the criteria used to classify the lease,  and  such
amortization  is  combined with depreciation in the  accompanying
income statements. Maintenance and repairs are charged to expense
as incurred and major improvements are capitalized.

Software  Development Costs - Effective the beginning  of  fiscal
1999,  costs  associated with the acquisition or  development  of
software  for  internal  use  that meet  the  criteria  of  AICPA
Statement of Position No. 98-1, "Accounting for Costs of Computer
Software  Developed or Obtained for Internal Use" are capitalized
and  amortized  over the expected useful life  of  the  software,
which  generally ranges from 3 to 10 years. Software  development
costs  capitalized  under SOP No. 98-1  in  fiscal  2000  totaled
$242,000 (none in 1999).

Goodwill - The excess of acquisition costs over the fair value of
the  net  assets acquired (goodwill) is amortized on a  straight-
line  basis over 20 years. The Company periodically analyzes  the
value  of net assets acquired to determine whether any impairment
in  the value of such assets has occurred. The primary indicators
of  recoverability used by the Company are current and forecasted
cash  flows of the related acquired assets as compared  to  their
carrying values.

Favorable  Lease Rights - Favorable lease rights associated  with
acquired  leases are amortized on a straight-line basis over  the
respective  lease  terms,  including option  renewal  periods  if
renewal of the lease is probable, which range from 1 to 40 years.

Cash  Management Liability - Under the Company's cash  management
program,  checks issued by the Company and not yet presented  for
payment  frequently result in overdraft balances  for  accounting
purposes.   Such  amounts  represent  interest-free,   short-term
borrowings by the Company. (See Note 6).

Deferred  Income - Deferred income consists primarily of  donated
land  and cash incentives received to construct a store and enter
into  a  lease  arrangement. Land contributed to the  Company  is
included  in  land and recorded at appraised fair market  values.
Deferred   income  is  amortized  to  income  over  the   average
depreciable  life of the related fixed assets built on  the  land
for locations that are owned by the Company, and over the minimum
lease  periods  of the related building leases  with  respect  to
locations that are leased by the Company, ranging from 10  to  32
years. Deferred income, net of accumulated amortization, totaling
$14,342,000 as of February 3, 2001 and $15,344,000 as of  January
29, 2000, is included in other liabilities.

Deferred  Lease  Payments - Certain of the  Company's  department
store  operating leases provide for rent abatements and scheduled
rent  increases  during the lease terms. The  Company  recognizes
rental expense for such leases on a straight-line basis over  the
lease term and records the difference between rental expense  and
amounts  payable  under  the leases as deferred  lease  payments.
Deferred lease payments, totaling $4,588,000 at February 3,  2001
and  $5,058,000  at  January  29, 2000,  are  included  in  other
liabilities.

Advertising  Costs  -  Advertising costs,  totaling  $30,111,000,
$24,327,000 and $22,270,000 in 2000, 1999 and 1998, respectively,
are expensed when the related advertisement first takes place.

Income  Taxes - Deferred tax assets and liabilities are generally
recognized  for  the expected future tax consequences  of  events
that  have  been  included  in the financial  statements  or  tax
returns,   determined  based  on  the  differences  between   the
financial  statement and tax basis of assets and liabilities  and
net  operating loss and tax credit carryforwards,  and  by  using
enacted tax rates in effect when the differences are expected  to
reverse.

Fair  Value of Financial Instruments - The carrying value of  the
Company's cash and cash management liability, receivables,  notes
receivable, trade payables and other accrued expenses,  revolving
line  of credit and stand-by letters of credit approximate  their
estimated fair values because of the short maturities or variable
interest   rates  underlying  those  instruments.   The  retained
interest  in  receivables  sold, the  retained  right  to  future
interest  income (interest-only strip) and the Subordinated  Note
are carried at their estimated fair values. The following methods
and  assumptions were used to estimate the fair values  for  each
remaining class of financial instruments:

     Long-Term  Obligations - The fair values  of  the  Company's
     mortgage  loans  and  notes  payable  are  estimated   using
     discounted  cash  flow  analysis,  based  on  the  Company's
     current  incremental borrowing rates for  similar  types  of
     borrowing  arrangements. Borrowings with aggregate  carrying
     values  of $33,673,000 and $27,937,000 at February  3,  2001
     and   January  29,  2000,  had  estimated  fair  values   of
     $35,287,000 and $28,664,000 at February 3, 2001 and  January
     29, 2000, respectively.

     Off-Balance Sheet Financial Instruments - The Company's off-
     balance  sheet  financial instruments consist  primarily  of
     certificates  issued under the securitization  program.  The
     estimated fair value of the fixed rate certificate, based on
     similar issues of certificates at current rates for the same
     remaining maturities, with a face value of $53,000,000 as of
     both  February 3, 2001 and January 29, 2000, is  $50,995,000
     and  $50,469,000, respectively. The estimated fair value  of
     the  floating  rate  certificate approximates  its  reported
     value  due  to  the variable interest rate  underlying  that
     instrument.

Stock-Based  Compensation - The Company accounts for  stock-based
awards   to  employees  using  the  intrinsic  value  method   in
accordance  with  APB  No. 25, "Accounting for  Stock  Issued  to
Employees".  Accordingly,  no  compensation  expense   has   been
recognized  in  the 2000, 1999 and 1998 financial statements  for
employee stock arrangements. Pro forma information regarding  net
income and earnings per share, as calculated under the provisions
of  SFAS  No. 123, "Accounting for Stock Based Compensation",  is
disclosed in Note 12.

Long-Lived  Assets  -  The  Company  periodically  evaluates  the
carrying  value  of  long-lived  assets  to  be  held  and  used,
including  goodwill and other intangible assets, when events  and
circumstances  warrant  such  a  review.  When  the   anticipated
undiscounted cash flow from a long-lived asset is less  than  its
carrying value, a loss is recognized based on the amount by which
its  carrying  value exceeds its fair market value.  Fair  market
value  is  determined primarily using the anticipated cash  flows
discounted  at  a rate commensurate with the risks  involved.  In
1999,  the  Company recognized a non-recurring  asset  impairment
charge  of  $1,933,000 related to an investment in a  cooperative
merchandise  buying group that was accounted for under  the  cost
method.  There were no impairment losses recognized  in  2000  or
1998.

Segment  Reporting  -  The  Company operates  in  one  reportable
segment,  which  includes the Company's proprietary  credit  card
operation. The proprietary credit card operation is considered an
integral component of the Company's retail store segment, as  its
primary  purpose is to support and enhance this segment's  retail
operations.

Comprehensive Income - There were no items of other comprehensive
income  in 2000, 1999 or 1998, and therefore net income is  equal
to comprehensive income for each of those years.

Recently Issued Accounting Standards -  SFAS No. 133, "Accounting
for  Derivative Instruments and Hedging Activities," is effective
for all fiscal years beginning after June 15, 2000. SFAS No. 133,
as  amended,  establishes accounting and reporting standards  for
derivative  instruments, including certain derivative instruments
embedded  in  other  contracts and for hedging activities.  Under
SFAS  133,  certain  contracts that were not formerly  considered
derivatives  may  now meet the definition of  a  derivative.  The
Company will adopt SFAS No. 133 effective as of the beginning  of
fiscal  2001. Management does not expect the adoption to  have  a
significant  impact  on  the  financial  position,   results   of
operations, or cash flows of the Company.

SFAS  No.  140,  "Accounting  for  Transfers  and  Servicing   of
Financial Assets and Extinguishments of Liabilities," was  issued
in  September  2000 and replaces SFAS No. 125. SFAS  No.  140  is
effective  for  transfers and servicing of financial  assets  and
extinguishments  of liabilities occurring after March  31,  2001,
with  certain disclosure requirements effective for fiscal  years
ending after December 15, 2000 (fiscal 2000 for the Company). The
statement  carries over most of the provisions of  SFAS  No.  125
without  reconsideration and, accordingly, the adoption  of  SFAS
No.  140  is  not  expected to materially  affect  the  Company's
financial position or the results of its operations. The  Company
adopted the disclosure provisions of SFAS No. 140 for its  fiscal
2000 financial statements.

Reclassifications - Effective as of the end of fiscal  2000,  the
Company  adopted  the provisions of Emerging  Issues  Task  Force
("EITF") Issue 00-10, "Accounting for Shipping and Handling  Fees
and  Costs," which requires that all amounts billed to a customer
in  a  sale  transaction  for shipping  and  handling,  including
customer delivery charges, be classified as revenue, and that all
prior  periods  presented be reclassified  to  conform  with  the
required   presentation.  The  Company  had  previously  included
shipping and handling revenues and costs in its selling,  general
and  administrative costs. These items and certain other  amounts
in   the   accompanying  1999  and  1998  consolidated  financial
statements  have  been  reclassified to  conform  with  the  2000
presentation.

2.   ACQUISITIONS

Asset Acquisition.

On  April  24, 2000, the Company entered into a definitive  asset
purchase  agreement (the "Agreement") with Lamonts Apparel,  Inc.
("Lamonts"). The Agreement, as subsequently amended, provided for
the  Company  to acquire 37 of Lamonts' 38 store leases,  related
store  fixtures and equipment, and one store building for a  cash
purchase price of $20,100,000. Concurrent with the closing of the
transaction on July 24, 2000, the Company sold one of  the  store
leases  for  $2,500,000, and subsequently  terminated  two  other
store  leases,  resulting  in  a  net  cash  purchase  price   of
$17,600,000  for  34  store leases, related  store  fixtures  and
equipment,  and one store building. The Company did  not  acquire
any  of  Lamonts'  merchandise inventory,  customer  credit  card
receivables or other corporate assets in the transaction, nor did
the  Company assume any material liabilities, other than  the  34
store  leases. The 34 stores are located in five Western  states,
with 19 stores in Washington, seven in Alaska, five in Idaho, two
in  Oregon  and  one  in  Utah,  and significantly  expanded  the
Company's presence in the Pacific Northwest and Alaska. The newly
acquired  stores  were converted to the Gottschalks  banner,  re-
merchandised  and re-opened in stages, beginning in  late  August
with all stores completely open by September 7, 2000. The Company
incurred $5,632,000 of non-recurring new store pre-opening  costs
in connection with the re-opening of the stores.

The  $17,600,000  net  cash purchase price  for  the  assets  was
partially financed with proceeds from a $10,000,000 note  payable
(Note  7),  with  the remainder provided from existing  financial
resources.  Direct transaction costs include investment  banking,
legal  and accounting fees and other costs. The asset acquisition
was  accounted  for under the purchase method of accounting  and,
accordingly, the results of operations of the acquired stores are
included   in  the  Company's  financial  statements   from   the
acquisition date of July 24, 2000.

The  purchase price has been allocated to the acquired assets  on
the  basis of their estimated fair values as of the date  of  the
acquisition, as follows (in thousands):

          Fair value of note payable         $10,000
          Cash                                 7,580
          Direct transaction costs             1,942
                                              ------
             Total purchase price            $19,522
                                              ======

          Favorable lease rights             $ 9,857
          Property and equipment               9,000
          Goodwill                               665
                                              ------
             Total purchase price            $19,522
                                              ======

Business Acquisition.

On  August  20,  1998, the Company completed the  acquisition  of
substantially  all  of  the assets and  business  of  The  Harris
Company  ("Harris"),  pursuant to  an  Asset  Purchase  Agreement
entered  into with Harris and El Corte Ingles, S. A.  ("ECI")  of
Spain,  the parent company of Harris. Harris operated nine  full-
line  department  stores located throughout southern  California.
Assets  acquired and liabilities assumed were recorded  at  their
estimated  fair values, and the excess of cost over the estimated
fair  values of the net assets acquired, totaling $8,400,000,  is
being  amortized  on  a straight-line basis over  20  years.  The
purchase price for the assets consisted of the issuance to Harris
of  2,095,900  shares  of common stock of  the  Company  and  the
issuance  of an 8% Non-Negotiable, Extendable, Subordinated  Note
(the  "Subordinated Note") in the principal amount of $22,179,000
(see  Note  8). The business acquisition was accounted for  under
the  purchase method of accounting and, accordingly, the  results
of  operations  of  the  acquired  stores  are  included  in  the
Company's  financial  statements from  the  acquisition  date  of
August 20, 1998.

3.   RECEIVABLES

Receivable Securitization Program.

The  Company  sells all of its accounts receivable arising  under
its  private label customer credit cards on a daily basis to  its
wholly-owned  subsidiary, GCRC, and those receivables  that  meet
certain    eligibility   requirements   of   the   program    are
simultaneously conveyed to Gottschalks Credit Card  Master  Trust
("GCC Trust"), to be used as collateral for securities issued  to
investors. GCC Trust is a qualified special purpose entity  under
both  SFAS  No.  125  and  140, and is not  consolidated  in  the
Company's  financial statements. Accordingly,  all  transfers  of
receivables  to  GCC  Trust  are  accounted  for  as   sales   of
receivables for financial reporting purposes and such transferred
receivables  are  removed from the Company's balance  sheet.  The
Company  services and administers the portfolio for a 3%  monthly
servicing fee, which totaled $1,926,000 in 2000.

On March 1, 1999, GCC Trust issued a $53,000,000 principal amount
7.66%  Fixed Base Class A-1 Credit Card Certificate (the  "1999-1
Series")  to  a  single  investor through  a  private  placement.
Proceeds  from  the issuance of the 1999-1 Series  were  used  to
repay the outstanding balances of previously issued certificates,
totaling  $26,950,000 as of that date, and  the  remaining  funds
were  used  to purchase additional receivables from the  Company.
The  holder of the 1999-1 Series certificate earns interest on  a
monthly  basis at a fixed interest rate of 7.66%. The outstanding
principal balance of the certificate, which is off-balance  sheet
for financial reporting purposes, is to be repaid in twelve equal
monthly  installments commencing September  2003  and  continuing
through August 2004.

On  November 16, 2000, GCC Trust issued a Variable Base Class A-1
Credit  Card  Certificate (the "2000-1 Series")  in  a  principal
amount  of up to $24,000,000. The Company can borrow against  the
2000-1  Series  certificate on a revolving basis,  similar  to  a
revolving line of credit arrangement. Such borrowings are limited
to   a  specified  percentage  of  the  outstanding  balance   of
receivables underlying the certificate. As of February  3,  2001,
$18,000,000  was issued and outstanding against the  certificate,
which was the maximum amount available for borrowings as of  that
date.  The 2000-1 Series certificate was issued under an  initial
364-day  commitment period (expiring October 31,  2001),  and  is
renewable  for subsequent 364-day periods each, at the option  of
GCC  Trust and the certificate holder, through July 31, 2003. The
outstanding  principal  balance  of  the  certificate,  which  is
treated as off-balance sheet for financial reporting purposes, is
to  be repaid in six equal monthly installments commencing in the
month  following the end of the commitment period. In  the  event
the  commitment  period is renewed through  July  31,  2003,  the
principal  is  to be repaid in twelve equal monthly  installments
commencing September 2003 and continuing through August 2004. The
holder  of  the  2000-1 Series certificate earns  interest  on  a
monthly  basis at a variable rate equal to one-month  LIBOR  plus
1.5% (7.38% at February 3, 2001).

Monthly   cash  flows  generated  by  the  Company's  receivables
portfolio,  consisting  of principal, interest  and  service  fee
collections, are first used to pay certain costs of the  program,
which  include  the payment of monthly principal (when  required)
and  interest to the investors, and monthly servicing fees to the
Company.  Any  excess  cash  flows are  then  available  to  fund
additional  purchases  of newly generated  receivables  from  the
Company. The Company is required, among other things, to maintain
certain   portfolio  performance  standards  under  the  program.
Management  believes the portfolio performance has exceeded  such
standards since the issuance date. Subject to certain conditions,
the master trust permits further expansion of the program to meet
future receivables growth.

The  Company  retains an ownership interest  in  certain  of  the
receivables  sold under the program, represented by  Exchangeable
and Subordinated Certificates, and also retains an uncertificated
ownership  interest in the retained interest to  future  interest
income  (interest-only strip) and other receivables that  do  not
meet  certain eligibility requirements of the program.  The  fair
value  of  the retained interests totaled $19,853,000 at February
3,  2001.  Key assumptions used to measure the retained interests
at the dates of securitization throughout fiscal 2000 were:

Repayment speed (monthly rate)               30.4%
Expected credit losses
 as a % of net sales (annual rate)           0.55%
Residual cash flows discount rate            12.0%
Weighted-average life (in months)             3.5


At  February 3, 2001, the reduction in the carrying amount of the
retained  interests  caused  by immediate  10%  and  20%  adverse
changes in those key assumptions are as follows (in thousands):

Prepayment speed:
  Impact on fair value of 10% adverse change      $(111)
  Impact on fair value of 20% adverse change       (170)

Expected credit losses:
  Impact on fair value of 10% adverse change       ( 13)
  Impact on fair value of 20% adverse change       ( 26)

Residual cash flows discount rate:
  Impact on fair value of 10% adverse change       (  1)
  Impact on fair value of 20% adverse change       (  2)

These  sensitivities  are  hypothetical  and  are  presented  for
illustrative purposes only. Changes in the carrying amount  based
on  a  change  in  assumptions generally cannot  be  extrapolated
because  the relationship of the change in an assumption  to  the
change  in the carrying amount may not be linear. The changes  in
assumptions presented in the above table were calculated  without
changing any other assumption; in reality, changes in one  factor
may  result  in  changes  in  another,  which  could  magnify  or
counteract the sensitivities.

As  of  February 3, 2001, the outstanding balance of the serviced
portfolio totaled $93,488,000, with $3,387,000 of that amount  in
delinquency  as of that date. Delinquent receivables are  defined
as  any  account for which the required minimum payment  has  not
been  received  for  more  than  30  days.  Credit  losses  as  a
percentage of net sales were 0.55% in 2000.

Receivables.

Receivables consist of the following:


<TABLE>
<CAPTION>
                                        February 3,    January 29
(In thousands)                             2001           2000
___________________________________________________________________________

<S>                                     <C>              <C>
Credit card receivables                 $3,974           $ 3,995
Vendor claims                            5,311             4,089
                                         -----            ------
                                         9,285             8,084
Less allowance for doubtful accounts    (  445)           (  487)
                                         -----             -----
                                        $8,840           $ 7,597
                                         =====             =====

</TABLE>

Net Credit Revenues.

Net   credit  revenues  associated  with  the  Company's  credit  card
receivable  portfolio, including securitized receivables, consists  of
the following:

<TABLE>
<CAPTION>


(In thousands)                           2000      1999     1998
___________________________________________________________________________

<S>                                    <C>       <C>      <C>
Service charge revenues                $16,832   $15,618  $13,522
Interest expense on securitized
  receivables                           (4,425)   (4,069)  (3,314)
Charge-offs on receivables sold and
  provision for credit losses on
  receivables ineligible for sale       (3,642)   (3,013)  (3,175)
Gain (loss) on sale of receivables         385       173      (45)
                                        ------    ------   ------
                                       $ 9,150   $ 8,709  $ 6,988
                                        ======    ======   ======

</TABLE>

4.   PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>

Property and equipment consists of the following:

                                        February 3,    January 29,
(In thousands)                             2001           2000
_____________________________________________________________________

<S>                                      <C>            <C>
Furniture, fixtures and equipment        $104,964       $ 86,155
Buildings and leasehold improvements       83,763         69,196
Land                                       15,108         15,108
Buildings and equipment under
  capital leases                           13,178         12,768
Construction in progress                    1,020            892
                                          -------        -------
                                          218,033        184,119
Less accumulated depreciation
  and amortization                        (74,363)       (63,726)
                                          -------        -------
                                         $143,670       $120,393
                                          =======        =======
</TABLE>


5.   INTANGIBLE ASSETS

Intangible assets consist of the following:


<TABLE>
<CAPTION>
                                        February 3,    January 29,
(In thousands)                             2001           2000
____________________________________________________________________

<S>                                       <C>            <C>
Goodwill                                  $11,464        $10,799
Favorable lease rights(Note 2)              9,857
                                           ------         ------
                                           21,321         10,799
Less    accumulated   amortization         (2,757)        (2,091)
                                           ------         ------
                                          $18,564        $ 8,708
                                           ======         ======
</TABLE>


The  amortization  of  intangibles, totaling  $666,000,  $536,000  and
$291,000  in  2000,  1999  and  1998,  respectively,  is  included  in
depreciation   and   amortization  in   the   accompanying   financial
statements.

6.   TRADE ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Trade accounts payable and accrued expenses consist of the following:


<TABLE>
<CAPTION>

                                        February 3,    January 29,
(In thousands)                             2001           2000
_____________________________________________________________________

<S>                                       <C>            <C>
Trade accounts payable                    $27,303        $15,617
Cash management liability                  21,460         10,027
Accrued expenses                           15,952         12,118
Accrued payroll and related liabilities     8,791          6,861
Taxes, other than income taxes              3,808         11,141
Federal and state income taxes payable      3,630          5,372
                                           ------         ------
                                          $80,944        $61,136
                                           ======         ======
</TABLE>


7.   DEBT

Revolving Line of Credit.

The  Company  has  a  $180.0  million revolving  line  of  credit
facility  with Congress Financial Corporation through  March  31,
2002.  Borrowings under the facility are generally limited  to  a
restrictive  borrowing base equal to 75% of eligible  merchandise
inventories, and at the Company's option, such borrowings may  be
increased  to  80% of eligible inventories during the  period  of
November  1  through  December 31 of each  year  to  provide  for
increased  seasonal  inventory requirements. Interest  under  the
facility  is  charged at a rate of approximately one-month  LIBOR
plus 1.875% (7.90% at February 3, 2001), with no interest charged
on  the  unused portion of the line of credit. The maximum amount
available   for   borrowings  under  the  line  of   credit   was
$131,135,000  as  of February 3, 2001, of which $112,828,000  was
outstanding  as  of that date. Outstanding borrowings  under  the
facility which are not expected to be repaid within one  year  of
the  respective balance sheet dates, totaling $80,000,000  as  of
February  3,  2001 and $50,000,000 as of January  29,  2000,  are
classified as long-term in the accompanying financial statements.
The  agreement contains one financial covenant, pertaining to the
maintenance  of a minimum adjusted net worth, as defined  in  the
agreement,  with  which  the Company  was  in  compliance  as  of
February 3, 2001.

Long-Term Obligations.

Long-term obligations consist of the following:


<TABLE>
<CAPTION>
                                         February  3,   January 29,
(In thousands)                               2001        2000
_______________________________________________________________________

<S>                                       <C>           <C>
Revolving line of credit                  $ 80,000      $50,000
9.39% mortgage loans payable, due 2010      18,645       18,958
Variable rate note payable, due 2003         8,611
9.97% mortgage loan payable, due 2004        2,714        3,643
Capital lease obligations                    5,876        7,216
Other mortgage loans and notes payable       3,703        5,336
                                           -------       ------
                                           119,549       85,153
  Less current portion                       6,537        4,479
                                           -------       ------
                                          $113,012      $80,674
                                           =======       ======


</TABLE>

The   Company  issued  a  $10,00,000  original  principal  amount
variable rate note payable, due 2003, to a third party lender  on
July  24,  2000. Proceeds from the note were used  to  finance  a
portion  of the purchase price for the Lamonts acquisition  (Note
2).   The   note  is  payable  in  thirty-six  monthly  principal
installments  of $278,000 each and bears interest at  a  variable
rate equal to LIBOR plus 3.0% (8.63% at February 3, 2001).

The  Company's  various  mortgage loans  and  notes  payable  are
collateralized by certain real property, assets or equipment.

The  scheduled  annual  principal  maturities  of  the  Company's
mortgage  loans  and  notes payable are  $5,836,000,  $4,773,000,
$3,436,000,  $906,000 and $660,000 for 2001  through  2005,  with
$18,062,000 payable thereafter.

Deferred  debt  issuance costs related to the  Company's  various
financing  arrangements are included in other current  and  long-
term  assets  and  are  charged to income as additional  interest
expense  on  a straight-line basis over the life of  the  related
indebtedness.   Such  costs,  net  of  accumulated  amortization,
totaled  $1,997,000 at February 3, 2001 and $1,552,000 at January
29, 2000.

Interest  paid,  net of amounts capitalized, was  $17,713,000  in
2000,  $14,536,000  in 1999 and $12,063,000 in 1998.  Capitalized
interest  expense  was  $360,000 in 2000, $188,000  in  1999  and
$134,000  in 1998. The weighted-average interest rate charged  on
the  Company's revolving line of credit was 8.76% in 2000,  7.52%
in 1999 and 7.88% in 1998.

Certain of the Company's long-term financing arrangements include
various   restrictive   financial   covenants,   including    the
requirement to maintain a minimum tangible net worth. The Company
was  in  compliance  with  all such  financial  covenants  as  of
February 3, 2001.

8. SUBORDINATED NOTE PAYABLE TO AFFILIATE

As  described  more  fully  in Note 2,  the  Company  issued  the
Subordinated  Note  to  Harris on  August  20,  1998  as  partial
consideration for the Harris acquisition. The Subordinated  Note,
discounted  to  an  effective interest rate of 10%  at  issuance,
bears interest at a fixed rate of 8%, payable semi-annually.  The
principal portion of the Subordinated Note is due and payable  on
August 20, 2003, unless such payment would result in a default on
any  of the Company's other credit facilities, in which case  its
maturity  could  be extended by three years to August  2006.  The
Subordinated Note is unsecured, contains no restrictive financial
covenants  and  is  subordinate  to  the  payment  of  all  debt,
including  trade  credit, of the Company.  The  discount  on  the
Subordinated  Note  is  being amortized  as  additional  interest
expense  over  the  five year term of the note.  The  unamortized
discount  totaled $876,000 as of February 3, 2001 and  $1,218,000
as   of  January  29,  2000.  Interest  paid  to  Harris  totaled
$2,117,000 in both 2000 and 1999 and $935,000 in 1998.

9.   LEASES

The  Company  leases certain retail department stores,  specialty
apparel  stores,  land, furniture, fixtures and  equipment  under
capital  and  noncancellable  operating  leases  that  expire  in
various years through 2021. Certain of the leases provide for the
payment of additional contingent rentals based on a percentage of
sales,  require  the  payment of property  taxes,  insurance  and
maintenance  costs  and  have renewal options  for  one  or  more
periods  ranging  from  five to twenty years.  The  Company  also
leases  three of its department stores from ECI, an affiliate  of
the  Company  (see  Note  2). Rent paid to  ECI,  which  reflects
current market rates, totaled $886,000 in 2000, $900,000 in  1999
and $391,000 in 1998.

Future minimum lease payments as of February 3, 2001, by year and
in   the  aggregate,  under  capital  leases  and  noncancellable
operating leases with initial or remaining terms in excess of one
year are as follows:

<TABLE>
<CAPTION>

                                          Capital   Operating
(In thousands)                            Leases      Leases
_____________________________________________________________________

<C>                                       <C>       <C>
2001                                      $1,269    $ 25,149
2002                                       1,232      23,393
2003                                       1,031      22,611
2004                                         752      21,777
2005                                         752      20,026
Thereafter                                 4,914     121,852
                                           -----     -------
Total minimum lease payments               9,950    $234,808
  Amount representing interest            (4,074)    ======
                                           -----
Present value of minimum lease payments    5,876
  Less current portion                     ( 701)
                                           -----
                                          $5,175
                                           =====
</TABLE>


<TABLE>
<CAPTION>
Rental expense consists of the following:

(In thousands)                       2000        1999       1998
____________________________________________________________________

Operating leases:
  Buildings:
    <S>                            <C>         <C>        <C>
    Minimum rentals                $15,946     $15,441    $14,395
Contingent rentals                   2,994       2,461      2,236
  Fixtures and equipment             2,342       3,158      3,275
                                    ------      ------     ------
                                   $21,282     $21,060    $19,906
                                    ======      ======     ======
</TABLE>


One  of  the  Company's lease agreements contains  a  restrictive
financial  covenant pertaining to the debt to tangible net  worth
ratio  with  which the Company was in compliance at  February  3,
2001.

10.  INCOME TAXES

The components of income tax expense are as follows:

<TABLE>
<CAPTION>

(In thousands)                        2000       1999       1998
_________________________________________________________________________

Current:
  <S>                               <C>         <C>        <C>
  Federal                           $  302      $  219     $2,737
  State                                550         459        377
                                     -----       -----      -----
                                       852         678      3,114
Deferred:
  Federal                            3,548       3,337        210
  State                                (26)        225        423
                                     -----       -----      -----
                                     3,522       3,562        633
                                     -----       -----      -----
                                    $4,374      $4,240     $3,747
                                     =====       =====      =====
</TABLE>


The principal components of deferred tax assets and liabilities
are as follows (in thousands):

<TABLE>
<CAPTION>

                                      February 3,         January 29,
                                          2001               2000
                                  __________________  __________________
                                  Deferred  Deferred  Deferred Deferred
                                    Tax       Tax        Tax     Tax
                                  Assets   Liabilities Assets Liabilities
                                  -------  ----------- ------ -----------
Current:
  <S>                             <C>                   <C>
  Accrued employee benefits       $ 1,489               $ 1,213
  Credit losses                       156                   132
  State income taxes                  239                   267
  LIFO inventory reserve                    $ (2,920)            $ (2,958)
  Supplies inventory                          (1,070)              (1,035)
  Workers' compensation                         (614)                (542)
  Gain on sale of receivables                   (205)                (120)
  Other items, net                    865       (947)       183    (1,817)
                                    -----     ------     ------   -------
                                    2,749     (5,756)     1,795    (6,472)
Long-Term:
  Net operating loss and tax
    credit carryforwards            3,407                 5,906
  State income taxes                  572                   580
  Depreciation expense                       (12,206)             (10,716)
  Accounting for leases               738     (2,995)       805    (3,253)
  Deferred income                   1,080     (2,793)     1,291    (2,571)
  Other items, net                    601     (1,205)       973      (624)
                                    -----    -------     ------   -------
                                    6,398    (19,199)     9,555   (17,164)
                                    -----    -------     ------   -------
                                  $ 9,147   $(24,955)   $11,350  $(23,636)
                                    =====    =======     ======   =======
</TABLE>


Income  tax  expense varies from the amount computed by  applying
the statutory federal income tax rate to the income before income
taxes. The reasons for this difference are as follows:

<TABLE>
<CAPTION>


                                  2000         1999        1998
_________________________________________________________________________

<S>                               <C>          <C>         <C>
Statutory rate                    35.0%        35.0%       35.0%
State income taxes, net of
 federal income tax benefit        3.0          4.2         5.8
General business credits          (2.9)        (2.2)       (1.7)
Amortization of goodwill            .4           .4          .4
Other items, net                   2.7          1.6         2.0
                                  ----         ----        ----
Effective rate                    38.2%        39.0%       41.5%
                                  ====         ====        ====
</TABLE>

The  Company paid income taxes, net of refunds, of $2,541,000  in
2000, $109,000 in 1999 and $138,000 in 1998. At February 3, 2001,
the  Company  has,  for  federal tax purposes,  general  business
credits  of  $1,192,000 which expire in the  years  2012  through
2020,  and alternative minimum tax credits of $784,000 which  may
be  used  for  an  indefinite period. At February  3,  2001,  the
Company   also  has,  for  state  tax  purposes,  $1,431,000   of
enterprise  zone  credits which may be  used  for  an  indefinite
period.  These  carryforwards  are  available  to  offset  future
taxable income.

11.  EARNINGS PER SHARE

Net  earnings per common share is computed by dividing net income
by  the  weighted-average  number of  common  shares  outstanding
during  the year. Stock options represent potential common shares
and are included in computing diluted earnings per share when the
effect  is  dilutive.  A reconciliation of  the  weighted-average
shares  used  in  the  basic  and  diluted  earnings  per   share
calculation is as follows:

(Shares in thousands)                    2000      1999     1998
____________________________________________________________________

Weighted average number of
  shares - basic                        12,614    12,577   11,418

Effect of assumed option exercises          18        39       31
                                        ------    ------   ------
Weighted average number of
  shares - diluted                      12,632    12,616   11,449
                                        ======    ======   ======


Options  with  an exercise price greater than the average  market
price  of  the  Company's  common stock  during  the  period  are
excluded  from the computation of the weighted-average number  of
shares on a diluted basis as such options are anti-dilutive. Anti-
dilutive  options  were  outstanding  for  924,728,  511,861  and
426,698   shares  as  of  the  end  of  2000,  1999   and   1998,
respectively.

12.  STOCK OPTION AND STOCK PURCHASE PLANS

Stock Option Plans.

The  Company  has stock option plans for directors, officers  and
key  employees  which provide for the grant of non-qualified  and
incentive  stock  options. Under the plans, the  option  exercise
price may not be lower than 100% of the fair market value of such
shares  at the date of the grant. Options granted generally  vest
on  a ratable basis over five years and expire ten years from the
date  of  the  grant.  At February 3, 2001, options  for  161,000
shares were available for future grants under the plans.

Option activity under the plans is as follows:


<TABLE>
<CAPTION>

                           2000                1999             1998
                     -----------------    ---------------  ---------------
                              Weighted-           Weighted-         Weighted-
                     Number   Average     Number  Average   Number  Average
                      of      Exercise      of    Exercise    of    Exercise
                     Shares   Price       Shares  Price     Shares   Price
                     ------   --------    ------  -------   ------  --------
Options outstanding
 at beginning of
  <S>               <C>        <C>        <C>      <C>      <C>       <C>
  year              953,000    $8.47      771,000  $8.45    500,500   $9.05

Granted             457,500     5.08      209,000   8.45    329,000    7.73
Exercised                                                    (1,250)   5.75
Cancelled           (46,000)    8.30      (27,000)  8.10    (57,250)   9.46
                  ---------     ----      -------   ----    -------    ----
Options outstanding
 at end of year   1,364,500    $7.34      953,000  $8.47    771,000   $8.45
                  =========     ====      =======   ====    =======    ====
Options exercisable
 at end of year     590,500    $8.70      465,750  $9.01    366,000   $9.50
                  =========     ====      =======   ====    =======    ====

</TABLE>


Additional   information   regarding   options
outstanding  as  of February  3,  2001  is  as
follows:


                                        Weighted-Avg.
                                         Remaining      Weighted-Avg.
    Range of               Number       Contractual      Exercise
Exercise Prices          Outstanding    Life (yrs.)       Price
---------------          -----------    -------------    ------------

$4.25 to $ 7.50            727,500         8.54           $5.81
$7.63 to $ 9.21            341,000         7.95           $8.32
$9.75 to $10.87            296,000         3.44           $9.95
---------------         ----------         ----            ----
$4.25 to $10.87          1,364,500         7.28           $7.34
===============         ==========         ====            ====



Employee Stock Purchase Plan.

The  Company  also has a statutory Employee Stock Purchase  Plan,
which allows its employees to purchase Company common stock at  a
15% discount. Employees can purchase stock under the Plan through
payroll  deductions  ranging from  1%  to  10%  of  their  annual
compensation,  up to a maximum of $21,250 per year.  A  total  of
500,000  shares were originally registered under the  Plan,  with
81,210 shares issued through February 3, 2001.

Accounting for Stock Based Compensation.

If  the  Company had elected to follow the measurement provisions
of  SFAS  No. 123 in accounting for its stock option and employee
stock  purchase plans, compensation expense would  be  recognized
based  on the fair value of the options at the date of grant.  To
estimate  compensation expense which would  be  recognized  under
SFAS  No. 123, the Company used the Black-Scholes options pricing
model with the following weighted-average assumptions:



                                  2000        1999       1998
                                  ----        ----       ----
Risk-free interest rate           4.8%        6.7%       4.6%
Expected dividend yield           ---         ---        ---
Expected volatility             51.21%      47.95%     51.08%
Expected option life (years)        5           5          5
Fair value of options granted   $3.01       $5.10      $4.38


Had  the computed fair values of the 2000, 1999 and 1998 awards been
amortized  to  expense over the vesting period of the  awards,  pro-
forma  net  income and earnings per share (in thousands, except  per
share data) would have been as follows:

                                  2000          1999        1998
                                  ----          ----        ----
Pro forma net income             $6,254        $6,237     $5,176
Pro forma net income per share -
  basic and diluted              $ 0.50        $ 0.50     $ 0.45


As  allowed by SFAS No. 123, the impact of outstanding non-vested
stock  options granted prior to 1995 has been excluded  from  the
pro-forma calculations; accordingly the 2000, 1999 and  1998  pro
forma  adjustments presented above are not indicative  of  future
period pro forma adjustments.

13.  RETIREMENT SAVINGS PLAN

The   Company  has  a  Retirement  Savings  Plan  ("Plan")  which
qualifies as an employee retirement plan under Section 401(k)  of
the  Internal  Revenue Code. Full-time employees meeting  certain
requirements  are  eligible to participate in the  Plan  and  may
elect  to  have  up to 20% of their annual eligible compensation,
subject  to  certain limitations, deferred and deposited  with  a
qualified  trustee.  Participants in  the  Plan  may  receive  an
employer  matching contribution of up to 4% of the  participants'
eligible  compensation, depending on the Company's quarterly  and
annual financial performance. Effective for 2001, the Company has
amended the Plan to provide for a guaranteed annual match of  3%,
including  the ability for participants to earn an additional  1%
depending  on  the  Company's annual financial  performance.  The
Company  recognized $1,073,000, $541,000 and $424,000 in  expense
related to the Plan in 2000, 1999 and 1998, respectively.

14.  COMMITMENTS AND CONTINGENCIES

The  Company is party to legal proceedings and claims which  have
arisen during the ordinary course of business. In the opinion  of
management, the ultimate outcome of such litigation and claims is
not  expected to have a material adverse effect on the  Company's
financial position or results of its operations.

The Company arranges for the issuance of letters of credit in the
ordinary course of business. As of February 3, 2001, the  Company
had outstanding letters of credit amounting to $498,000.

15.  QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the unaudited quarterly results  of
operations  for  2000 and 1999 (in thousands,  except  per  share
data):


<TABLE>
<CAPTION>
                                              2000
                            ___________________________________________
Quarter Ended               April 29  July 29   October 28  February 3
--------------              --------  -------   ----------  ----------

<S>                         <C>       <C>        <C>        <C>
Net sales (1)               $121,335  $129,939   $153,694   $258,900
Gross profit                  41,034    45,067     57,316     86,727
Income (loss) before
  income tax expense
  (benefit)(2)                (1,390)       17     (4,086)    16,912
Net income (loss)             (  841)       11     (2,472)    10,381
Net income (loss)
  per common share -
    basic and diluted       $  (0.07) $  (0.00)  $  (0.20)   $  0.83
Weighted-average
  number of common
  shares outstanding:
    Basic                     12,597    12,605     12,621     12,582
    Diluted                   12,597    12,629     12,621     12,616


                                              1999
                          _____________________________________________
Quarter Ended               May 1    July 31    October 30  January 29
-------------               -----    -------    ----------  ----------

Net sales (1)             $111,502   $119,209   $123,330     $187,234
Gross profit                37,930     41,351     44,366       63,618
Income (loss) before
  income tax expense
  (benefit)(3)              (1,851)   (   180)       615       12,292
Net income (loss)           (1,079)   (   105)       358        7,462
Net income (loss)
  per common share -
    basic and diluted     $  (0.09)  $  (0.01)   $  0.03     $   0.59
Weighted-average
  number of common
  shares outstanding:
    Basic                   12,575     12,575     12,575       12,581
    Diluted                 12,575     12,575     12,646       12,615


(1)  The     Company's     net    sales     by     quarter     in
     both    fiscal   2000   and   1999   have   been   increased
     to    include    shipping   and   handling   fees    charged
     to    customers,   in   accordance   with   EITF   No.   00-
     10     (Note    1).    Such    amounts    were    previously
     credited        to        selling,        general        and
     administrative expenses.

(2)  Income  (loss)  before income tax expense (benefit)  in  the
     three month periods ended July 29, 2000 and October 28, 2000
     include non-recurring, pre-tax charges for costs incurred in
     the  reopening  of  the  34  stores  acquired  from  Lamonts
     totaling $977,000 and $4,655,000, respectively. The total of
     such costs recognized in fiscal 2000 amounted to $5,632,000.

(3)  Income  (loss)  before income tax expense (benefit)  in  the
     three  month period ended January 29, 2000 includes  a  non-
     recurring,  pre-tax  charge for $1,933,000  to  reflect  the
     impairment  of  an investment accounted for under  the  cost
     method.

                   ********



</TABLE>
<TABLE>
<CAPTION>



                    SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                           GOTTSCHALKS INC. AND SUBSIDIARY

________________________________________________________________________________
   COL. A           COL. B      COL.        COL. D        COL. E       COL. F
________________________________________________________________________________

                                    ADDITIONS
                             -------------------------
                Balance at   Charged to   Charged to               Balance at
                Beginning    Costs and   Other Accounts  Deductions  End of
DESCRIPTION     of Period     Expenses      Describe      Describe    Period
________________________________________________________________________________

Year ended February 3, 2001:
---------------------------
  Allowance for doubtful
    <S>        <C>        <C>           <C>           <C>             <C>
    accounts   $  406,688 $1,024,964(1) $             $(1,063,018)(2) $368,634
  Allowance for vendor
    claims
    receivable $   80,000 $                             (    4,000)(3) $ 76,000

Year ended January 29, 2000:
---------------------------
  Allowance for doubtful
    accounts   $1,535,165 $  982,260(1) $ (177,000)(4) $(1,933,737)(2)$406,688
  Allowance for vendor
    claims
    receivable $  120,700 $                             (   40,700)(5)$ 80,000

Year ended January 30, 1999:
---------------------------
  Allowance for doubtful
    accounts   $  437,179 $  991,523(1) $  881,759(6) $(775,296)(2) $1,535,165
  Allowance for vendor
    claims
    receivable $   80,000 $                  40,700(7)              $  120,700



</TABLE>

 Notes:

     (1)  Represents the provision for credit losses  on  receivables
          ineligible for sale.

     (2)  Represents  uncollectible accounts written off, net  of  recoveries,
          pertaining to receivables ineligible for sale.

     (3)  Represents a change in estimate for the allowance for
          vendor claims receivable.

     (4)  Represents a change in estimate for the allowance for
          doubtful accounts related to receivables
          which  were  ineligible for sale. This  amount  is
          included in net credit revenues in the fiscal
          1999 consolidated income statement.

     (5)  Represents a change in estimate for the allowance for
          vendor claims receivable applicable to
          vendor claims acquired from Harris (see Note 2 to the
          Consolidated Financial Statements.)

     (6)  Represents the allowance for doubtful accounts applicable
          to the receivables acquired from Harris  (see  Note  2  to
          the  Consolidated  Financial Statements).

     (7)  Represents the allowance for vendor claims receivable
          applicable to the outstanding vendor claims
          acquired from Harris (see Note 2 to the Consolidated
          Financial Statements.)






                  SIGNATURES


       Pursuant   to   the   requirements   of
Section 13 or 15(d) of the Securities Exchange
Act  of  1934, the Registrant has duly  caused
this report to be signed on its behalf by  the
undersigned, thereunto duly authorized.

Dated: April 17, 2001               GOTTSCHALKS INC.


                               By:/s/ James R.Famalette
                                  ----------------------
                                  James R. Famalette
                                  President   and Chief Executive
                                  Officer


       Pursuant  to  the requirements  of  the
Securities  Exchange Act of 1934, this  report
has been signed below by the following persons
on   behalf  of  the  Registrant  and  in  the
capacities and on the dates indicated.

Signature                       Title                 Date
------------                    ------                ----


/s/ Joseph W. Levy              Chairman             April 17, 2001
-------------------------
Joseph W. Levy


                                President, Chief
                                Executive Officer    April 17, 2001
/s/ James R. Famalette          and Director (principal
-------------------------       executive officer)
James   R.   Famalette



                                Senior Vice President
                                and Chief Financial
                                Officer (principal   April  17, 2001
                                financial and
/s/   Michael   S.   Geele      accounting officer)
--------------------------
Michael S. Geele



/s/ O. James Woodward III       Director             April 17, 2001
--------------------------
O. James Woodward III




/s/ Bret W. Levy                 Director            April 17, 2001
--------------------------
Bret W. Levy



/s/ Sharon Levy                  Director            April 17, 2001
--------------------------
Sharon Levy



/s/ Joseph J. Penbera            Director           April 17, 2001
--------------------------
Joseph J. Penbera



/s/ Fred Ruiz                     Director          April 17, 2001
--------------------------
Fred Ruiz



/s/ Max Gutmann                    Director          April 17, 2001
--------------------------
Max Gutmann



/s/ Isidoro Alvarez Alvarez        Director          April 17, 2001
---------------------------
Isidoro Alvarez Alvarez



/s/ Jorge Pont Sanchez             Director          April 17, 2001
---------------------------
Jorge Pont Sanchez