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Women’s retailer Coldwater Creek is preparing to file for bankruptcy-court protection as the result of a declining sales, high debt load, and broader industry struggles. The company has been struggling to refinance or find another buyer.

The company, known for selling a variety of women’s clothes and accessories via catalogs and mall-based retail stores, also operates factory stores, an e-commerce business and seven spas in the U.S.

Attempts to Avoid Bankruptcy Unsuccessful

According to its most recent earnings filing, Coldwater Creek carries about $353 million in total debt, which includes about $180 million in current liabilities. The company has been struggling for months. Previous attempts to refinance debt as well as sell itself to a private-equity buyer have proven to be unsuccessful. But the company’s post-bankruptcy strategy isn’t clear.

The publicly-traded company posted sales of about $155 million for the quarter ended Nov. 2, 2013, compared with $188 million in the year-earlier period. In 2012 private-equity firm Golden Gate Capital provided Coldwater Creek a $65 million term loan and has the option to buy stock in the company.

Overall Retail Sector

Coldwater Creek’s struggles echo those of the broader retail sector with many other retailers facing severe distress.

Brookstone Inc. is another retailer preparing to file for bankruptcy. It has plans to be sold to another specialty retailer. And plus-size women’s retailer Ashley Stewart Holdings Inc. has also filed for bankruptcy protection. Women’s clothing retailer Dots LLC filed for bankruptcy in January. A month prior discount retailer Loehmann’s Holdings Inc. filed for Chapter 11 protection. That company is now in the process of shutting down its stores.

For information and guidance on bankruptcy, you need the experts at Resnick Hayes Moradi LLP.

Source: Wall Street Journal, Coldwater Creek Preparing to File for Bankruptcy, March 31, 2014

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