NEW YORK — Coldwater Creek Inc. founder and chairman Dennis Pence has reassumed the title of chief executive officer from Georgia Shonk-Simmons, who remains president of the firm and adds the new post of chief merchandise...
NEW YORK — Coldwater Creek Inc. founder and chairman Dennis Pence has reassumed the title of chief executive officer from Georgia Shonk-Simmons, who remains president of the firm and adds the new post of chief merchandise officer.
Shonk-Simmons will retain her seat on the board of directors of the Sandpoint, Idaho-based multichannel retailer.
The joint-management structure is designed to allow both Pence, 52, and Shonk-Simmons, 51, to focus their individual strengths and collective experience on the goal of establishing Coldwater Creek as one of the major brands in women’s apparel, the firm said in a statement.
"This marks a return to a structure that worked very well in Coldwater Creek’s corporate history," said Pence in a statement. "My personal charge from the board of directors is returning the company to our days of rapid growth. As we continue to grow the brand through catalogs, over the Internet and, increasingly, with the expansion of our retail store base across the country, I look forward to leveraging my sales and marketing experience and placing additional emphasis on improving our return on invested capital and operating earnings."
The ceo change comes hard on the heels of Coldwater Creek’s disappointing quarterly earnings report, released last week. For the three months ended Aug. 31, the company recorded a net loss of $650,000, or 6 cents a diluted share. That compares with last year’s profits of $1.3 million, or 12 cents. However, earnings per share did beat Wall Street forecasts by 1 cent.
Sales for the quarter nicked down 0.1 percent to $92.8 million from $92.9 million a year ago, while the cost of sales grew 5.7 percent to $56.7 million from $53.7 million last year. The company accounts for store occupancy costs as a component of those expenses.
Pence ceded the ceo title to Shonk-Simmons in December of 2000. Needing a break, he said he wanted his executive team to take over "day-to-day operations" of the company. Since then, the firm has seen its sales growth slow — sales for the fiscal year ended March 2 were $464 million, up 1.2 percent, following 26.8 percent growth in the prior year — and earnings have been down two years in a row. Last year, net income dropped 86.4 percent to $1.8 million.Until reentering retail in 1999, Coldwater engaged exclusively in catalog and Internet retailing, but now has 39 stores and will add four more in 2002 and between 15 and 20 in 2003. After posting operating profits two years in a row, its stores last year had an operating loss of $439,000 on sales of $63.2 million.
In a research note to investors, William Blair & Co. analyst Ellen Schlossberg wrote: "While surprised by the changes, we understand the rationale, and the deeper focus ultimately will be better for the business. We have always viewed Ms. Shonk-Simmons as an extremely strong merchant with a great eye for Coldwater’s customer. Our biggest concern was that she may leave the company; however, after speaking with her, we are very confident that Ms. Shonk-Simmons is as committed as ever to Coldwater Creek."
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