Cost cutting and inventory management weren’t enough to offset sinking consumer demand as multichannel misses’ apparel retailer Coldwater Creek Inc. widened its fourth-quarter loss.
For the period ended Jan. 31, the Sandpoint, Idaho-based firm recorded a net loss of $18.6 million, or 20 cents a diluted share, compared with a net loss of $17 million, or 19 cents a share, for the year-ago quarter. Revenue fell 18 percent, to $283.2 million, from $345.5 million last year. By segment, direct sales dropped 30 percent to $83.5 million, and retail sales slid 11.7 percent to $199.7 million with same-store sales down 21.4 percent.
“We realize were are not going to cost cut our way to strategic success,” president and chief executive officer Daniel Griesemer said on the company earnings call. While “clearly not satisfied” with the quarterly and yearly results, he said the company will focus on improving its product assortment and customer service, among other things. The retailer said it saw weakness in its pants, outerwear and jackets businesses as consumers opted for lower-priced apparel such as tops and accessories.
“Our goal is to increase our fashion relevance. We are intensely focused on improving our product,” said chief merchandising officer Georgia Shonk-Simmons, with different silhouettes and fabrics planned for its assortment.
During the quarter, the retailer opened seven stores, bringing its count to 348. In 2009, Coldwater plans to open as many as 10 stores.
For the 12 months, Coldwater had an almost $26 million net loss, or 29 cents a share, versus a net loss of $2.5 million, or 3 cents a share, a year earlier. Annual revenue declined 11.1 percent, to $1.02 billion, from $1.15 billion.
Citing economic “volatility,” Coldwater declined to provide EPS guidance, but said that it expected selling, general and administrative expenses to be reduced another $30 million in 2009.
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