US: Coldwater Creek warns of wider FY loss
Women's wear retailer Coldwater Creek expects to report a wider full-year loss of US$0.31-0.33, thanks to a sharp decline in same-store sales.
The company is targeting further cost reductions and is poised to more than halve capital expenditure during 2009 as it tries to ride out the retail downturn in the US.
In a trading update, Coldwater Creek forecast fourth quarter sales of about $280m, with same-store sales plummeting 22%.
It expects a loss of $0.23-0.25 for the quarter, compared to a loss of $0.19 for the same period in 2007.
However, the company said it had secured a $20m-plus decline in expenses during the quarter - ahead of expectations and making a total of $60m in expense reductions during fiscal 2008.
For the full year, the retailer expects sales of about $1bn and a loss per share of $0.31-0.33, compared to a loss of $0.03 for fiscal 2007.
Coldwater Creek said it had identified savings of at least $30m in fiscal 2009, and expected to cut capital spending to just $30m, down from about $75m the previous year.
It will now open no more than ten stores in fiscal 2009, compared to 43 the year before.
"We expect a continued challenging macroeconomic environment and therefore remain focused on the variables we can control, such as elevating the product assortment, enhancing the customer experience, reducing expenses and strengthening the balance sheet," said Daniel Griesemer, president and CEO.
"We are pleased with our brand direction and are confident that we are taking the right steps to position our company to be an even stronger organisation when consumer spending improves."
Coldwater Creek is due to report its fourth quarter and full year results on 4 March.
Meanwhile, the company has secured an extension to its credit facility with Wells Fargo, increasing the aggregate commitment amount by $10m to $70m, subject to borrowing base limitations.
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