Women’s clothing retailer Coldwater Creek is preparing to file for bankruptcy after struggling with a high debt load and declining sales in an already challenging retail market.
The company, known for both its women’s catalog business and retail stores, has been trying to regain its footing for months, battling against accelerating negative comparable store sales.
Last October, the retailer said it would explore strategic alternatives to enhance shareholder value, including the consideration of potential partnerships, joint ventures or a possible sale or merger, but did not set a timeline for the process.
At the time of last year’s statement, Coldwater Creek president and chief executive officer Jill Dean, said, “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. 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.”
But attempts to skirt bankruptcy by refinancing debt or sell itself to a private-equity buyer have been unsuccessful, unnamed sources told The Wall Street Journal, and sales did not pick up.
For the fiscal 2013 third quarter ended November 2, Coldwater Creek posted consolidated net sales of $155 million compared to $188 million in the same period the previous year and comparable premium retail sales were down 16.8% for the quarter.
As of November 2, the company had roughly $353.1 million in total liabilities, $6.8 million in cash and was operating 343 retail stores, according to its latest financial filing. Aside from its catalog business and brick-and-mortar locations, Coldwater Creek also operates factory stores.
After the Journal announced the bankruptcy news Monday, the retailer’s stock tanked. Shares dropped a substantial 76 percent Monday, but Tuesday saw an uptick with prices up 37.5% to $0.22 at the time of this article’s publication.