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Chapter 11 a Possibility for Coldwater Creek

Shares fell 76.1 percent on Monday after the women’s specialty chain was said to be eyeing a voluntary petition.

Shares of Coldwater Creek Inc. fell 76.1 percent on Monday after the women’s specialty chain was said to be eyeing a voluntary Chapter 11 petition.

WWD reported in February that liquidators were circling around the retailer, given that discussions regarding a sale process that began in October were not going well. There were rumblings of a possible bankruptcy filing, although the company then was still in discussions with its lender, as well as prospective lenders, hoping to get some breathing room. There was talk in the industry that Coldwater Creek was a possible Chapter 11 as early as late November.

The Wall Street Journal reported on Monday that a filing could come within a week.

One of the problems the chain faces is trying to figure out where it fits in when compared with its competitors who target women between ages 40 and 60, such as Chico’s and Talbots. Since before Thanksgiving weekend, the chain has been having repeated promotions as it tried to boost sales. Some observers have said Coldwater Creek has lost its fashion mojo. Others who specialize on the operating end of the business criticize the chain for expanding too aggressively with boxes far bigger than needed, on average double the size of its competitors.

Coldwater Creek in July closed on a $65 million senior secured term loan provided by private equity firm Golden Gate Capital. It also has a $70 million revolving credit facility with Wells Fargo Capital Finance, which is set to mature on May 16, 2016.

Golden Gate executives, whose firm is a secured lender, declined comment.

The retailer’s chief financial officer James A. Bell, could not be reached for comment by press time.

Shares of Coldwater Creek closed Monday at 16 cents, down 51 cents, in Nasdaq trading.