Sandpoint, ID—In a move that didn’t surprise anyone, Coldwater Creek Inc. today filed for bankruptcy protection, planning to start its going-out-of-business sale in time for Mother’s Day, which had been one of its busiest seasons in the past.
The 379-unit specialty women’s retailer last reported an annual profit in 2006, since then it has posted a series of losses. For its most recent third quarter report ended Nov. 2 last year, Coldwater’s sales were down 18% with comparable store sales down 17%.
‘Exhausted All Possibilities’
Coldwater losses amounted to $59.6 million in the first three quarters of the fiscal year ended Feb. 2, according to Bloomberg News. That’s on top of a loss of $81.8 million last year.
The company’s shares have plummeted 95% in 12 months including a 17% drop on Thursday which valued Coldwater at $5.8 million, Bloomberg reported.
In its Chapter 11 filing in the U.S. Bankruptcy Court in Wilmington, Del., Coldwater listed assets of $278.5 million and debt of $361.3 million.
Last fall, Coldwater said it was exploring strategic alternative, possibly a sales. But according to what James Bell, chief operating officer, reported in the filing, after reaching out to 75 companies for refinancing or as a buyer, no one came forward.
“The company’s declining liquidity position and the challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action,” CEO Jill Dean said in a statement today.
Coldwater asked the bankruptcy court to schedule a sale-approval hearing for May 6 so it can start liquidation before Mother’s Day. In its liquidation plans agreed upon with its lenders, the company received a $75 million commitment in debtor-in-possession financing from Wells Fargo & Co., a current lender.
Began as Catalog
Dennis Pence, a former Sony Corp. executive, started Coldwater Creek as a catalog in 1984, selling women’s accessories and gifts. By the 1990s Coldwater began opening stores reaching 379 doors as of last November, including 31 factory outlets and seven day spas. The company has 330 employees at its headquarters and more than 5,500 elsewhere, according to court filings.