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.”
In honor the @CFDA’s announcement of @iamnaomicampbell receiving the Fashion Icon Award at the 2018 #CFDAAwards, which will take place on June 4, here’s a #tbt of the supermodel on @michaelkors’ runway in 1991. #wwdfashion #wwdarchive (📷: George Chinsee)
“I was making the guacamole when my scout saw me,” says model @stuckinteenage on being discovered just six months ago while working at @chipotlemexicangrill. Since then Williams has signed with @dnamodels, walked in her first show at @calvinklein and landed on the cover of @vogueitalia – a high point of any model’s career. To read @lisajlockwood’s full interview with the model on her experiences thus far, head to WWD.com – link in bio. (📷: George Chinsee)
“I love the idea of dialogue, period. It’s where I’ve always gotten my inspiration from: hearing other women speak, their journeys and their paths,” said @hereisgina, who delivered the keynote speech during @sxsw for @createcultivate in partnership with @fossil. For her two panels, Rodriguez chose female empowering, female-led and female entrepreneurs to focus on. Head to WWD.com to read more about her thoughts on Time’s Up, growing up in a family of women and why we “need a girls’ club.” #wwdeye #sxsw (📷: @jgreenery)
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.