SANDPOINT, ID—Coldwater Creek Inc. on Friday said it had filed for voluntarily Chapter 11 petitions in US Bankruptcy Court in Wilmington, DE. Coldwater Creek Inc. The women’s clothing chain, which operates more than 370 stores in 47 states, is planning an orderly liquidation in the latest of a recent flurry of retail bankruptcies.
Jill Dean, Coldwater Creek’s president and CEO, says the “difficult decision” to liquidate was precipitated by the company’s declining liquidity position and “the challenging retail environment.” The company had unsuccessfully sought a buyer or a source of capital to fund turnaround initiatives, as part of a review of its options over the past six months.
Coldwater Creek said it had reached an agreement with its lenders on a Chapter 11 plan of liquidation and has tapped Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to manage its inventory clearance sales, which are expected to begin in May. It has also received a commitment for $75 million in debtor-in-possession financing from Wells Fargo, its existing lender.
Holders of Coldwater Creek’s common stock aren’t expected to recover of any of their investment. Share prices have declined 95% over the past 12 months, according to Bloomberg, putting the company’s current value at $5.8 million.
Founded in 1984, Coldwater Creek is the third nationwide women’s apparel chain to declare bankruptcy since the start of the year. In January, Dots LLC filed for Chapter 11 and liquidated its 400 stores the following month. Ashley Stewart last month said it would close 27 of its 168 stores and look to sell the rest, according to the Daily Bankruptcy Review. Three fast-food chains hit hard by the decline in mall traffic—Sbarro LLC, Quiznos and Hot Dog on a Stick—have also filed for bankruptcy protection in recent weeks, Bloomberg reported Friday.