SecProbe.io

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Mail Stop 3561

									September 13, 2005

Mr. James R. Famalette
President and Chief Executive Officer
Gottschalks Inc.
7 River Park Place East
Fresno, CA 93720

      RE:		   Gottschalks Inc.
            	        	Form 10-K for Fiscal Year Ended
      January 29, 2005
      Filed April 29, 2005
	  	Form 10-Q for Fiscal Quarter Ended
		April 30, 2005
		Filed June 10, 2005
		Form 10-Q for Fiscal Quarter Ended
		July 30, 2005
		Filed September 9, 2005
	File No. 001-09100

Dear Mr. Famalette:

	We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents.  Where indicated, we think you should
revise your filings in response to these comments.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure.  After reviewing this information, we may raise
additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-K for Fiscal Year Ended January 29, 2005

Management`s Discussion and Analysis of Financial Condition and
Results of Operations

Overview
1. In light of the significant charges incurred related to the
closure of 16 of the 34 stores acquired in the Lamont acquisition,
and in light of your disclosure that your acquisition of these 34
stores put significant pressure on your operating performance and
liquidity position, please revise to discuss the operating and
cash
flow performance of the 18 remaining stores, including the
reasonably
likely future effect on your financial condition and operating
performance of the continued operation and/or closure of these
stores.  Refer to Item 303(A) of Regulation S-K and SEC Release
33-
8350.

Liquidity and Capital Resources
2. Please expand your discussion of the significant year over year
changes in cash flows from operating activities to identify all
working capital changes that materially affect your liquidity
along
with the reasons underlying the working capital changes.   We
believe
such additional disclosure is necessary to permit a reader to
understand the extent to which changes in cash flows are the
result
of growth of the business versus changes in timing of working
capital
turnover (e.g., changes in inventory days outstanding, days
payables
outstanding, days sales outstanding, etc.).

Contractual Obligations
3. Please revise your table to include estimated interest payments
on
your long-term debt obligations.  Because the table is aimed at
increasing transparency of cash flow, we believe these payments
should be included in the table.  If you choose not to include
these
payments, a footnote to the table should clearly identify the
excluded items and provide any additional information that is
material to an understanding of your cash requirements.  See
Section
IV.A and footnote 46 to the Commission`s MD&A Guidance issued
December 19, 2003 available at www.sec.gov.

Controls and Procedures

Changes in Internal Control Over Financial Reporting
4. Please revise your disclosure regarding changes to internal
controls over financial reporting to identify "any changes," not
just
"significant" changes, which have materially affected, or are
reasonably likely to materially affect, your internal controls
over
financial reporting.  See Item 308(c) of Regulation S-K.

Consolidated Financial Statements

Consolidated Income Statements
5. Please revise to separately present miscellaneous (non-
operating)
income and miscellaneous (non-operating) expenses.  Please also
provide footnote disclosure regarding the nature and amounts of
the
items included within the revised captions.  Refer to Rules 5-
03(7)
through (9) of Regulation S-X.

Notes to Consolidated Financial Statements

Note 1.  Nature of Operations and Significant Accounting Policies

General
6. Please disclose how you account for the "Gottschalks Rewards"
program, including the timing of recognition of the costs
associated
with the program, as well as the line item on the income
statements
where the costs are included.  Ensure the disclosure also
addresses
how you account for rewards at the time of redemption and how your
accounting takes into consideration reward certificates issued
that
are not expected to be redeemed.  Tell us the basis in GAAP for
your
accounting and income statement classification.
7. Please disclose the amount of cooperative advertising
allowances
recorded in each period presented.  Please also revise your MD&A
to
discuss the changes in these payments between periods and how they
impacted the related income statement line items, if material.

Revenue Recognition
8. Please disclose the timing of revenue recognition for leased
department revenues.  Also disclose the general terms of the
arrangements under which you earn leased department revenues.  For
example, you should disclose whether revenues earned under these
arrangements are based on a percentage of sales generated in the
leased departments, or based on some other measure.
9. Please disclose the timing of revenue recognition for net
credit
revenues and how you determine the amount of net credit revenues
to
record.  Also clarify whether the amounts retained by HSBC for
credit
card receivables charges are treated as a reduction of revenues
and
why or why not.

10. Please disclose your accounting policy for gift cards that
expire
or are not redeemed over an extended period of time.

Note 8 - Discontinued Operations
11. Please tell us in detail how you determined that the closed
stores qualify for classification as discontinued operations
pursuant
to paragraph 42 of SFAS 144.  We are particularly interested to
understand your consideration of whether significant cash flows
related to the closed stores will continue to be generated by your
ongoing operations through a migration of customers to your other
stores.  In this connection, it would be helpful if you could
provide
us with the specific locations of the closed stores along with the
approximate distance to the closest company owned store still
operating.   Please refer to paragraphs 4 through 8 of EITF 03-13
for
guidance.

Note 10 - Income Taxes
12. Citing the factors in paragraphs 20-25 of SFAS 109, please
explain to us the positive and negative evidence you considered in
determining that a valuation allowance for the amounts recorded
was
appropriate for all years presented.  Additionally, please revise
your MD&A to discuss the reasons for the valuation allowance and
to
highlight the judgments and assumptions involved in evaluating the
sufficiency of the valuation allowance.  Please ensure your
discussion gives appropriate weight to the unfavorable factors
which
give rise to your determination that a valuation allowance is
necessary.

Note 12 - Accounting for Stock Based Compensation
13. Please tell us and revise your disclosure to clarify what the
assumption in the table captioned "fair value of options granted"
represents.

Note 16 - Restatement of Financial Statements
14. Please revise to also disclose previously reported versus
restated cash flows for the year ended February 1, 2004.  Since
the
year ended February 1, 2004 is marked as restated on the face of
the
statements of cash flows, we assume such additional disclosure is
relevant.  Moreover, please revise your disclosure to clarify the
cash flow impact, if any, of the correction of your previous
accounting for tenant allowances and construction reimbursements.
In
this regard, since you previously recorded these allowances as
reductions in the cost of the underlying constructed assets, we
assume you likewise recorded the cash inflows related to these
allowances as investing cash inflows.  However, under your
corrected
accounting, these cash flows would be classified as operating cash
inflows.   If you had previously classified these cash flows as
operating, and no revision was necessary, please ensure your
disclosure is clear in this regard.

Schedule II - Valuation and Qualifying Accounts
15. Please revise to include your allowance for estimated sales
returns.  See Rules 5-04 and 12-09 of Regulation S-X for guidance.
Forms 10-Q for the Quarterly Periods Ended April 30, 2005 and July
30, 2005

Item 4 - Controls and Procedures
16. You disclose that you designed your disclosure controls and
procedures to provide "only reasonable assurance" of achieving the
desired control objectives.  Therefore, please revise your
conclusion
regarding the effectiveness of your disclosure controls and
procedures to reflect, if true, that the disclosure controls and
procedures are effective at the "reasonable assurance" level.
Please
refer to Part II.F.4 of Final Rule Release 33-8238 for guidance.

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  Please furnish a letter that keys your responses
to
our comments and provides any requested information.  Detailed
response letters greatly facilitate our review.  Please file your
response letter on EDGAR.  Please understand that we may have
additional comments after reviewing responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision.  Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

	You may contact David DiGiacomo at (202) 551-3319, or in his
absence, Robyn Manuel at (202) 551-3823 if you have questions
regarding comments on the financial statements and related
matters.
Please contact me at (202) 551-3843 with any other questions.

                  Sincerely,

            George F. Ohsiek, Jr.
    					          Branch Chief

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Mr. James R. Famalette
Gottschalks Inc.
September 13, 2005
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