Coldwater Creek Mulls “Strategic Alternatives” Including Sale

In Industry News, Reports, What's New by Jeff PrineLeave a Comment

Fall style at Coldwater Creek

Fall style at Coldwater Creek

Sandpoint, ID—With forecasts that its third quarter sales are falling even further behind, Coldwater Creek said Monday that it will explore a possible sale and other strategic alternatives.

“As a result of an increasingly challenging retail environment, we are continuing to take the necessary steps towards improving our financial position as well as our long-term prospects as a more competitive and successful company,” said President/CEO Jill Dean. “In that regard, we will continue to concentrate on maximizing shareholder value with a relentless focus on driving sales and customer loyalty, as well as prudently right-sizing the business to today’s environment.”

To Go Private?

The women’s specialty retailer, which has posted losses for the past three years, reported that its third quarter earnings will likely fall below its previous estimates of an adjusted loss between 55 and 75 cents a share. The retailer has initiated cost-cutting initiatives and looked for value from its real estate holdings. However, sales have continued to slide, dropping 7.3% in its second quarter when its lost $16.4 million.

Perella Weinberg Partners will help Coldwater Creek’s board of directors evaluate its options. The retailer said it has no timetable to complete the process “and does not intend to disclose further developments with respect to this process unless and until its Board of Directors approves a specific transaction or otherwise concludes the review of strategic alternatives.”

According to reports at The Street, a “source said Coldwater Creek, with a market cap below $50 million, no longer sees the need to be public. The company’s situation is comparable to that of Talbot’s, which was acquired in May 2012 by private equity firm Sycamore Partners LLC for about $370 million last year, including debt.”

“Private equity firms with interest in distressed retailers have shown interest” in Coldwater Creek, according to The Street.


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