Coldwater Creek Reduces Store Growth Plans

Coldwater Creek Reduces Store Growth Plans
November 06, 2008

Sandpoint, Idaho-based Coldwater Creek announced preliminary third-quarter results and withdrew its previously issued sales and earnings per share guidance for the fourth quarter of fiscal 2008. For the third quarter of 2008, the company expects sales of approximately $225 million, reflecting a same-store sales decline in the low 20s. "While we continue to believe in our retail expansion strategy, we are reducing our store growth plans for 2009 in light of the current market conditions," said Dan Griesemer, president and CEO of Coldwater Creek. "We now plan to open approximately 15 new stores, down from our previous plan of approximately 40 new stores. Additionally, our analysis of any new store opportunity will take into account a higher hurdle rate as a result of the challenging retail environment." At the end of fiscal 2008, the company expects total inventory to be down approximately 10 percent versus the end of fiscal 2007, despite adding 43 new stores, and that it will have more than $75 million in cash, compared to $62.5 million in cash at the end of fiscal 2007. Due to the reduced store growth plan, the company anticipates that 2009 capital expenditures will be approximately half of the amount it expects to record in 2008.