US: Declining sales push Coldwater to file for bankruptcy
US retailer Coldwater Creek has filed for bankruptcy in order to facilitate an orderly wind-down of its operations, amid declining sales and deeper losses.
In a filing today (11 April), the company said it has filed voluntary petitions under Chapter 11 in the US Bankruptcy Court in Wilmington, Delaware. The firm expects to commence sales to liquidate its inventory in early May.
The Idaho-based company said it has received a commitment for US$75m in debtor-in-possession financing from its existing lender Wells Fargo.
"While we are extremely disappointed with this outcome, the company's declining liquidity position and the challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action," said CEO Jill Dean.
"As we begin preparing to wind down our operations, customers should know that our stores and website remain open for business and we will be providing information about the tremendous values that will be available at our inventory clearance sales in the coming weeks."
Over the last six months, Coldwater said it has engaged in "a thorough analysis" of all potential alternatives, including a sale of the company, but was unable to find a potential buyer or a source of capital to provide adequate liquidity to help turn the company around.
In its third-quarter in December, Coldwater recorded a double-digit sales decline, falling margins and a wider net loss. Months earlier it had initiated a restructuring programme, slimming its workforce expense by 20%.
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