Coldwater Creek Inc. today announced that it filed voluntary petitions under Chapter 11 and plans to close its stores, including those in Naperville, Geneva, South Barrington and Deer Park, the company said in a statement.
In the meantime, Coldwater Creek's stores and its website remain open for business. The company, based in Sandpoint, Idaho, expects to start liquidation of its inventory in early May.
Together with its financial and legal advisers, over the last six months, Coldwater Creek engaged in a thorough analysis of all potential alternatives, including a sale of the company.
A phone message left with the company's attorneys was not immediately returned.
Ultimately, the company and its advisers were unable to find a potential buyer for the company or a source of capital to provide adequate liquidity to fund the company's ongoing strategic turnaround initiatives. As a result, the company's board of directors determined that an orderly liquidation of the business would be the best way to maximize value for the benefit of the company's creditors. The company intends to hold going out of business sales in the coming months, which are historically busy shopping periods for Coldwater Creek, the company said in a release.
"First and foremost, we are extremely grateful to all of our associates for 30 years of dedicated service to Coldwater Creek and to the millions of loyal customers who have enjoyed our award winning customer service and beautiful and unique products. Our talented associates continue to impress, performing their duties with professionalism and grace during this period of uncertainty," Jill Dean, president and CEO, said in a statement.
"This difficult decision follows a comprehensive strategic and financial review of the business. The board of directors has determined that the actions we are taking represent the best path forward for Coldwater Creek and its stakeholders. 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." She added, "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," she said.
In conjunction with its Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Del., Coldwater Creek has received a commitment for $75 million in "debtor-in-possession" financing from its existing lender, Wells Fargo. Subject to court approval, this financing will be available to support the company's operations during the wind-down process, the company said.
Importantly, and in an effort to maximize creditor recoveries and reduce administrative expenses through a swift and efficient Chapter 11 process and liquidation, Coldwater Creek has reached an agreement with its lenders on a Chapter 11 plan of liquidation that was filed today with the bankruptcy court.
The company also has reached an agreement with inventory liquidators, Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, to manage the company's inventory clearance sales. The plan of liquidation does not contemplate any recovery for holders of the company's common stock. The plan of liquidation and related disclosure statement is subject to approval by the bankruptcy court.
More information for consumers is available at http://www.coldwatercreek.com/CustomerService/InvestorFAQ.
•Daily Herald Business Writer Anna Marie Kukec contributed to this report.