Weak performance of Coldwater merchandise offerings
19 May '11
2 min read
Coldwater Creek Inc announced that it completed an amendment of its existing credit facility that extends the facility maturity date three years to May 16, 2016, which includes the addition and funding of a $15 million term note. The Company also announced preliminary first quarter 2011 results.
The term note transaction generated net cash proceeds of $14.4 million for the Company subsequent to the end of the first quarter of fiscal 2011. As part of the amended credit agreement, the Company granted the lenders a security interest in the Company's Sandpoint, Idaho corporate offices and certain other assets. The amount available under the $70 million revolving facility remains unchanged; however, the Company now has a future option to request an increase in the amount of the revolving facility for an additional $15 million, which if granted would result in a total of $85 million available, exclusive of the term note.
Regarding this transaction, Jim Bell, Chief Financial Officer stated, "We have been evaluating opportunities to further strengthen our balance sheet and effectively monetize our owned real estate assets. We are pleased to have completed this transaction, which provides us additional financial flexibility as we continue the work to reposition our brand."
The Company also announced preliminary first quarter 2011 results. For the three months ended April 29, 2011, the Company currently expects:
• Net sales of approximately $180 million, reflecting a decline in comparable premium retail store sales of approximately 28% as compared to the first quarter of last year. • Loss per share of $0.32-$0.34, compared to a profit of $0.03 last year. • Total inventory at quarter end is expected to decline in the high-single digit range as compared to inventory at the end of the first quarter last year. Premium retail inventory per square foot is expected to be down between 7%-9%, as compared to premium retail inventory per square foot at the end of the first quarter last year.
Dennis Pence, Chairman and Chief Executive Officer stated, "During the first quarter, we experienced continued weak trends in traffic and sales as our merchandise offerings were not well received by our customers. We are in the process of repositioning our brand and view 2011 as a transitional year for Coldwater Creek. We look forward to seeing the results of our new design, development and merchandising initiatives as we move through the year."
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