Coldwater Creek Next to File for Bankruptcy?

coldwaterSandpoint, ID—After failing to strike up a strategic alternative for its future—and now facing possible bankruptcy, Coldwater Creek got a welcome relief today as its shares were up 32% in early trading. That was after plummeting more than 76% on Monday following a report by The Wall Street Journal that the women’s specialty retailer is on the brink of filing for bankruptcy.

No White Knight Investor

“Coldwater Creek Inc. is preparing to file for bankruptcy-court protection within about a week as it contends with a high debt load, declining sales and broader industry struggles, people familiar with the matter said,” WSJ reported.

In its last earnings report, Coldwater Creek’s net sales dropped 18% to $154.5 million. Comp store sales fell 17%. That follows losses it has reported for the past three years.

Golden Gate Capital provided a $65 million term loan to Coldwater Creek in 2012 and has the option to buy stock in the company.

Attempts to refinance the company’s $353 million in total debt or find a private equity investor to take it private evidently haven’t been successful.

Compounding Coldwater Creek’s problems are some of the same toils and tribulations facing many retailers: lackluster holiday sales, highly promotional environment and lower traffic patterns.

Although Coldwater Creek has yet to respond to the reports, it evidently plans to file for bankruptcy within a week.

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com