Loss Widens For Coldwater Creek
Catalog retailer Coldwater Creek generated $1.02 billion during its fiscal 2008, down from $1.15 billion in fiscal 2007. The company’s net loss widened from $2.5 million a year ago to just under $26 million. The company’s fiscal year ended Jan. 31.
Coldwater Creek’s direct channel, which includes both Web sites and catalogs, pulled in $272.9 million during 2008, down from $376.4 million in 2007. Its retail operations generated $751.4 million, down from $775.1 million in 2007. During the year the chain expanded its premium retail store count from 306 in 2007 to 348, and its outlet store count from 30 to 35 locations..
During its fourth quarter, which included the fall/winter holiday season, the company recorded $283.2 million, down from $345.5 million a year earlier. Direct sales fell from $119.3 million a year ago to $83.5 million, while retail revenue dropped from $226.3 million to $119.7 million.
The Analyst’s Take: Coldwater Creek expanded its premium retail store square footage by more than 15%. This accounts for some of the decrease in direct marketing’s importance in the revenue mix: In 2007, direct channels generated 32.8% of the company’s revenue. This fell to 26.6% in 2008 – a 6.2 percentage point drop. But here’s a number for comfort: In fourth-quarter 2007, direct made up 34.5% of the company’s revenue. By 2008 it had fallen to 29.5% — a 5 percentage point decline. Why is this comforting? Because it means despite increased floor space for the year, Coldwater Creek’s direct channels performed above their full-year level during the most recent quarter.
