Coldwater Creek Inc

Women quenched their thirst for classic, casual clothing and accessories from Coldwater Creek's stores, catalog, and Web site. The upscale multi-channel retailer sold mostly traditional apparel through some 360 full-line stores and about 35 retail outlets that targeted middle- and upper-income women 35 years of age and older. It also sold directly to consumers via its Coldwater Creek catalog and online store and operated about 10 namesake day spas. While the company began as a catalog operator, its retail presence was felt more at the mall than the mailbox, with stores accounting for more than 75% of sales. Founded in 1984, Coldwater Creek filed for bankruptcy in 2014 and closed up shop.

Bankruptcy

Coldwater Creek filed for Chapter 11 bankruptcy protection in April 2014 after failing to find a buyer. The company listed $278.5 million in assets and $361.3 million in debt in its bankruptcy filing. It began liquidation sales at its stores around the Mother's Day holiday and had closed all of its stores by early summer.

Financial Performance

The company's fiscal 2012 (ends January) financial performance was all wet. Sales plunged 21% vs. the previous year, and are down a whopping 25% since fiscal 2010. The retailer lost money for the fifth consecutive year. The chain's dismal performance in 2012 was driven by double digit decreases in sales at both its retail and outlet shops and in online and catalog sales.

The steep drop and sales and profits is due to more than the recession, its lingering effects, and slack demand for new apparel among its target customers. Coldwater Creek has an obvious fashion problem. Indeed, the chain has blamed its tepid sales on too much bland, copy-cat, lower-priced merchandise. Its top priority is to evolve its merchandise assortment to offer more compelling, unique fashions by offering a lifestyle focused collection. To build a firmer foundation for the future, Coldwater Creek recently made significant changes in the executive suite. The company hired Jill Dean to head its merchandising -- to give a boost to its merchandising and creative teams -- and promoted Jerome Jessup to president and chief creative officer, who has since added new talent to the company's New York design center.

Strategy

The historically fast-growing chain more than tripled its store count from 114 locations in 2005 to about 370 in 2011. However, in fiscal 2012 it closed 10 stores as it attempts to right itself. In addition to halting new store growth, the company has also pared its library of catalogs down to its core Coldwater Creek title, which is designed to drive traffic to the retail stores. The company mailed nearly 59 million catalogs, down significantly from about 128,500 million in 2008. Accounting for part of the drop, Coldwater Creek discontinued its Spirit catalog, which offered more upscale women's apparel and jewelry, and Northcountry, which in addition to apparel and jewelry carried gifts items and merchandise for the home.

The company has no plans to expand its Coldwater Creek - The Spa business (launched in 2006) -- which to date has had a negative impact on earnings. Located close to the retail stores, the day spas offer facials, massages, manicures, pedicures, and a line of women's clothing and personal care products.

Dennis and Ann Pence own about a third of Coldwater Creek's shares. Dennis, chairman and CEO of the company, is steering Coldwater Creek back toward its roots by introducing more "unique and differentiated offerings" and trying to raise prices.

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Coldwater Creek Inc


1 Coldwater Creek Dr
Sandpoint, ID 83864-9044
Phone: 1 (208) 263-2266
Fax: 1 (208) 2631582
www.coldwatercreek.com

STATS


  • Employer Type: Public
  • President, CEO, and Director: Jill Dean
  • President and Chief Creative Officer: Jerome Jessup
  • Chairman: Dennis Pence

Major Office Locations

  • Sandpoint, ID

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