Coldwater Creek Ups Expansion

Coldwater Creek's chairman and CEO, Dennis Pence, said that the success of its retail locations offers it the opportunity to gain market share by opening additional stores in key national markets in 2006. The company expects to end this year with 60 new stores for a total of 174 locations, all of which are expected to be in operation by the holiday selling season.

Based on its new plans, Coldwater Creek now expects to have 239 stores in operation before Thanksgiving 2006, according to Dan Griesemer, EVP of sales and marketing.Locations already have been confirmed and approved for next year, and the company is reviewing locations for 2007, according to Griesemer.

Besides speeding its rate of expansion, Coldwater Creek plans to increase the size of its stores. Those planned for 2006 will be approximately 500 sf larger and will now average about 5,500 sf.

Griesemer noted that more than half of the total business now comes from retail stores operated by the company, which began by selling via the Internet and now sees the prospect of growing to a total of up to 500 stores during the next several years.

The expanded store base and the increased size are the latest in a series of moves that Coldwater Creek has implemented since opening its first full-line retail store in 1999. The company, which targets women between the ages of 35 and 60 with median household incomes in excess of $75,000, calls these moves an "evolution from a direct marketer to a multi-channel specialty retailer."

Along the way it has tested various retail store models and now says that its retail business, which represented 61.6% of its total net sales in the second quarter of fiscal 2005, will be the key driver of its growth. The company also operates 21 outlet stores where it sells excess inventory, and it plans to open one more outlet store this fiscal year.

Unlike many other apparel retailers, Coldwater Creek uses its outlet stores only to sell overstocked items from its full-line retail stores and does not have merchandise produced directly for them. It also operates two resort stores in Sandpoint, ID and Jackson, WY and a design studio in New York.