Women quench their thirst for classic, casual clothing and
accessories from Coldwater Creek's stores, catalog, and Web site.
The upscale multi-channel retailer sells mostly traditional apparel
through some 360 full-line stores and about 35 retail outlets,
targeting middle- and upper-income women 35 years of age and older.
It also sells directly to consumers via its Coldwater Creek catalog
and online store and operates about 10 namesake day spas that
typically span 5,400 sq. ft. While it got its start as a
catalog operator, today the company's retail presence is
felt more at the mall than the mailbox, with stores accounting for
more than 75% of sales. Coldwater Creek was founded in 1984 by
Dennis and Ann Pence.
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
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.
The historically fast-growing chain has 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
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