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Sycamore Acquires Coldwater Creek IP Assets

The private equity firm intends to operate it as an independent entity.

Private equity firm Sycamore Partners has acquired the intellectual property assets of bankrupt women’s specialty retailer Coldwater Creek.

The purchase, which included customer lists, was through a Sycamore affiliate, CWC Direct LLC, last month at a bankruptcy court auction in Delaware. A Delaware bankruptcy court has already approved the acquisition.

A source familiar with Sycamore’s plans said the financial firm intends to reestablish the business in the future. The entity would operate as a separate company under Sycamore’s growing portfolio that now includes Talbots, Hot Topic and the former Jones Group brands.

As for specifics on what direction that relaunch may take, whether retail stores or just online, that hasn’t been determined yet, this individual said.

Coldwater Creek filed its bankruptcy petition in April, and is still in wind-down mode. The specialty chain began going-out-of-business sales last month. Two criticisms that have surfaced on why the retailer had been struggling were connected to the fashion content of its merchandise and to the square footage of many of its stores, largely double or more the size of a typical Chico’s or Talbots store, its two main competitors.

While not uncommon among brand management firms, the purchase of distressed IP assets is a more recent trend among financial investors looking for investments that can be built up and later monetized.

An example earlier this year was the January acquisition of Loehmann’s IP assets, also in a bankruptcy court auction, by hedge fund Esopus Creek Value Series Fund LP. Showing some mettle that it knows what to do with the investment, Loehmann’s was back online last month for a soft launch less than three months after going-out-of-business sales were completed. Esopus also hired Charles Koppelman of brand development and advisory firm CAK Entertainment Inc. to help with the relaunch of the brand. The Loehmann’s site is still being tweaked and is expected to do a hard launch midsummer.

In the case of Coldwater Creek, sources familiar with Sycamore’s thinking said the private equity firm believes the specialty chain still has strong brand recognition. One individual said the brand continues to have “deep support from its loyal customer base.”