NEW YORK — Strong holiday sales combined with cost controls to lift fourth-quarter profits for multichannel retailer Coldwater Creek.
This story first appeared in the March 13, 2003 issue of WWD. Subscribe Today.
The Sandpoint, Idaho-based firm, which sells women’s apparel and accessories through catalogs, the Internet and 43 retail stores, reported income for the two-month period ended Feb. 1 of $1.5 million, or 9 cents a diluted share, reversing a loss of $963,000, or 6 cents. Overall sales for the quarter rose 29.7 percent to 114.5 million over $88.3 million.
The truncated reporting period is due to the company’s earlier decision to end its fiscal year on the Saturday closest to Jan. 31, as the majority of retailers do, instead of the one closest to Feb. 28.
“The holiday merchandise assortment was on target, with a combination of color, novelty and key items that set Coldwater Creek apart in the marketplace,” Georgia Shonk-Simmons, president and chief merchandising officer, said in a statement. “Our ability to integrate the merchandise across all three selling channels drove increased traffic and further reinforced the brand.”
On a conference call from Paris, Simmons said the company is approaching the new year cautiously and expects the second half of the year to deliver the strongest results.
“We expect to continue to pick up market share through merchandise and retail growth,” she said. “I feel good about our focus on the initiatives and taking merchandise to the next level of novelty.”
Key holiday items were jackets, knitwear, jewelry and accessories, offset by weakness in dresses.
By division, sales from the direct segment, which includes the catalog, e-commerce and outlet businesses, increased 25.5 percent to $88 million from $70.1 million. Direct sales represented 76.8 percent of the company’s total net sales in the quarter, versus 79.3 percent last year.
Sales from the retail segment rose 45.6 percent to $26.6 million from $18.3 million and represented 23.2 percent of total net sales, compared with 20.7 percent.
The firm plans to open 23 more stores in fiscal 2003, representing a 54 percent increase in the number of retail locations.
“Our retail rollout strategy for fiscal 2003 includes three test stores with a smaller footprint of 3,500 square feet, which ultimately may allow us to open stores in secondary and tertiary markets,” Dennis Pence, chairman and chief executive, said, also noting that the firm expects to increase its pace of store openings in 2004.
Net income for the 11 months increased 184.6 percent to $9.4 million, or 58 cents a diluted share, versus $3.3 million, or 20 cents, in 2001. Net sales increased 8.6 percent to $473.2 million from $435.7 million. Direct segment sales decreased 3.2 percent to $365.7 million from $377.7 million, and retail store sales increased 85.2 percent to $107.5 million from $58 million.