On Friday it launched Super Weekend, which ended Sunday, a sales event that provided for discounts of between 30 percent and 60 percent in stores and online, including 30 percent off newly arrived spring merchandise. Super Weekend is the latest in a series of ongoing promotions that started even before the recent Thanksgiving Day-Black Friday kickoff to the holiday selling season.
In October, the women’s specialty retailer said its board approved the evaluation of “strategic alternatives,” which includes, but is not limited to, “partnerships, joint ventures or a sale or merger of the company.” It hired Perella Weinberg Partners as its financial adviser.
Sources familiar with some of the ongoing discussions said last week that the “sale process has not gone well.” Other sources said a few asset disposition firms have started circling around the specialty chain.
To be sure, the presence of liquidators doesn’t necessarily mean that a bankruptcy or liquidation is on the horizon. One option could involve a downsizing that entails store closures, speculated one of these individuals.
Sources said Coldwater currently is meeting with prospective lenders. In July, it closed on a $65 million senior secured term loan provided by Golden Gate Capital, a private equity firm. It also has a $70 million revolving credit facility with Wells Fargo Capital Finance, which is set to mature on May 16, 2016. Sources said the company has enough liquidity to last through this spring, but a new facility will enable it to have more time for its turnaround efforts to gain some sort of foothold with consumers.
On Dec. 11, the Sandpoint, Idaho-based firm said its third-quarter net loss widened to $23.8 million, or 78 cents a diluted share, from a year-ago net loss of $20.5 million, or 67 cents. Net sales fell 17.9 percent to $154.5 million from $188.1 million. The last time it posted a quarterly profit was the second quarter of 2010. The last time it posted full-year profits was in 2006. It is set to post fourth-quarter and full-year results on March 5.
Shares of Coldwater slipped 1.6 percent to close at 88 cents in Nasdaq trading. It has until July 1 to raise its share price to $1 or risk delistment. The specialty chain has two big albatrosses: huge retail boxes and merchandise that hasn’t been resonating with the consumer.
Coldwater, which started as a catalogue firm selling Northwest-style fashions in 1984, began a push into brick-and-mortar four years later when it opened its first retail outlet on Cedar Street Bridge in Sandpoint, Idaho. One huge problem is that it expanded too aggressively with boxes far bigger than needed, critics have said. One of those contacts said the average-size store is 6,800 square feet. This person noted that Coldwater’s competitors such as Chico’s and Talbots have many stores that are just half the size of Coldwater’s boxes.
What the chain does have are decent real estate locations. “The real estate is in good markets and well located. They are in the areas where the demographics fit who is the chain’s targeted consumer,” said Andrew Graiser, copresident at A&G Realty Partners.
Lisle Davies, chief executive officer of consulting firm Davies + Co., said, “If there’s compelling product out there, people will buy.” As for Coldwater, Davies noted, “Their merchandise has not been resonating with the consumer. That, coupled with oversized stores, Coldwater can’t get the productivity it needs.”
According to Davies, the product at Coldwater is nondifferentiated and can be found somewhere else. “That’s different from a Talbots, which has a more conservative dress-up point-of-view for the professional woman, or Ann Taylor, which is more fashionable,” she added.
Consultant Walter Loeb said, “I’m not sure Coldwater has any meaning to customers. The assortments are confused. The stores are too large.…Coldwater targets women ages 40 to 60, but they already have Talbots as an option.”
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
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Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews