Coldwater Said to Plan Liquidation After Bankruptcy
Coldwater Creek Inc. (CWTR), a women’s clothing retailer that hasn’t been profitable since 2007, is planning to liquidate its assets after a bankruptcy filing that may come as soon as today, according to two people with knowledge of the matter.
The company received a so-called stalking horse, a minimum bid from parties that would sell off the retailer’s assets to repay creditors, said the people, who asked not to be identified because the matter isn’t public. The filing would come five months after Coldwater said it was exploring strategic alternatives, including a sale.
Coldwater would follow Dots LLC and Loehmann’s Inc., two clothing chains that have liquidated in recent months amid sluggish consumer spending. Sales at Coldwater stores open at least a year, considered a key gauge of retail performance, plunged 17 percent in the quarter ended Nov. 2.
Sharon Stern, a spokeswoman for Sandpoint, Idaho-based Coldwater with Joele Frank Wilkinson Brimmer Katcher, declined to comment. Nathaniel Garnick, a spokesman for Golden Gate Capital Corp., Coldwater’s biggest lender, with Sard Verbinnen, declined to comment.
Dennis Pence, a former Sony Corp. executive, started Coldwater as a catalog in 1984, selling women’s accessories and gifts, according to a 2005 Businessweek profile that highlighted the company’s rapid growth at the time. The company began opening stores in the 1990s and had 379 stores as of Nov. 2.
The company’s liquidation value could range from $100.9 million to $176.8 million, Kevin Starke, who specializes in distressed investments at CRT Capital Group LLC in Stamford, Connecticut, said today in an e-mail.
Coldwater’s shares fell 13 percent to 20.5 cents at the close in New York.