Coldwater Creek runs dry
PARKERSBURG – Coldwater Creek filed for bankruptcy Friday, announcing it will begin winding down operations in May, closing all its stores and the distribution center in the Parkersburg Industrial Park near Interstate 77.
Company officials said they came to the decision to file under Chapter 11 of the bankruptcy code after failing to find a potential buyer or a source of capital to help fund its turnaround efforts.
Coldwater Creek CEO Jill Dean said Friday the Parkersburg distribution center and outlet store employ 300 people.
“As we have announced we will be open for some time,” she said. “At this time we do not have an exact time line but early May is when we begin our going out of business sale.”
Three months ago, on the advice of the board of directors and financial and legal advisers, the company began looking at a potential buyer or other source of capital for the retailer that had both an e-commerce and brick and mortar presence, Dean said.
While they were searching for a buyer or financing, Dean said, they explored several options and implemented cost-cutting measures.
Dean said the company filed for an orderly liquidation and has just reached an agreement with its liquidators, Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, that has to be approved by the bankruptcy court in Delaware.
In a press release, the company said the liquidation plan does not contemplate any recovery for its shareholders and it still needs approval from the bankruptcy court. Coldwater Creek Inc. is getting $75 million in debtor-in-possession financing from existing lender Wells Fargo to help it wind down its business.
Bradley Berfield, vice president of distribution and the leader in the Parkersburg distribution center, acknowledged the decision was disappointing for the company but officials will take steps to help the employees find jobs elsewhere.
“We are going to partner with the Work Force West Virginia to help our employees, reaching out to the community and work with them internally to prepare for the job search and help them move over to new roles,” he said. “Parkersburg and the Mid-Ohio Valley have been outstanding and we could not have asked for a better place to operate. This is a very difficult time for our associates as expected, but at the same time the things that brought us here, their work ethic and dealing with adversity, made them perform so well.”
Berfield said the company does not expect any terminations from the distribution center as it begins to receive that last few items and ship merchandise out to the stores and online customers.
“As we begin to move forward to our orderly wind down, products will continue to flow out and for some time we will continue to service stores and e-commerce with products,” he said.
As for terminations later on, Berfield said the company will “cross those bridges as we get to them.”
Cam Huffman, president and chief executive officer for the Wood County Development Authority/Economic Roundtable, said the authority had been contacted by the company. Coldwater Creek was leasing the distribution center from the Wood County Development Authority.
“They have contacted us to let us know,” he said Friday. “We have not sat down directly to talk about this with them; we are going to let them get their feet under them.”
Huffman said the authority has been in contact with the state development office.
“As soon as we get the green light and talk with them to see how we can help. They have a lot on their plate right now.”
Huffman said he has been told it was business as usual at the center.
“Regardless of what goes on the benefit for us is instead of a store we have a distribution center for their entire operation,” he said. “It’s going to be a open for a while.”
Ashley Flowers, finance director for the City of Parkersburg, said the company paid $6,000 in business and occupation taxes in 2013.
Coldwater Creek has struggled in recent years due to weak consumer spending and a failure to find fashions that resonated with customers. It hadn’t posted a quarterly profit since the second quarter of 2010.
The Sandpoint, Idaho-based company had cut costs and closed some stores during its attempts to keep the business afloat. It made other moves to improve its profitability, but declines in sales trends continued to intensify.
Coldwater Creek said that the liquidation plan doesn’t contemplate any recovery for its shareholders. The liquidation plan still needs approval from the bankruptcy court.
Coldwater Creek Inc. is getting $75 million in debtor-in-possession financing from existing lender Wells Fargo to help it wind down its business. The company made its bankruptcy filing in the U.S. Bankruptcy Court in Wilmington, Del.
(The Associated Press contributed to this report.)