Sandpoint, 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.
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“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.