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Posted: Saturday, April 12, 2014 10:00 am
By CAMERON RASMUSSON Staff writer
SANDPOINT — The once-bustling Coldwater Creek headquarters now feels more like a ghost town.
Employees arrived for work Friday morning and soon abandoned the campus in droves after learning the company had filed for Chapter 11 bankruptcy protection. With business proving increasingly unsustainable, Coldwater Creek officials plan to liquidate assets and pay off debts, which total $361 million, according to the bankruptcy filing. Eventually, the company will close all its physical and Internet-based stores.
“This all happened very quickly,” Coldwater Creek CEO Jill Dean said Friday. “It’s a devastating impact and not at all what we were expecting.”
For the more-than 300 individuals who worked at the Sandpoint corporate headquarters, the news didn’t come as a surprise, but that didn’t lessen the blow. It’s still unclear, Dean said, which employees will be held on to aid the liquidation process. Either way, they’ll all receive a minimum of 60 days salary. The company will also do whatever it can to help employees find new jobs, Dean said. They’ll even assist those who want to stay in Sandpoint, although that will be an easier process for some than it will be for others, she added.
“Our employees love living and working in this community, which makes this news today even harder for them,” Dean said.
“We’ll do everything we can to help our employees find employment and a soft landing,” she added.
Altogether, Coldwater Creek employed almost 500 people within Bonner and Kootenai counties. Most of these jobs were full-time positions with solid salaries and benefits. The loss was difficult to take for many, who found themselves gathering at bars and breweries for a consolatory drink. Most declined to comment on the closure, choosing to focus on more light-hearted matters.
“I grew up in this town, and for me, it’s just really sad we lost a company with such a strong local heritage,” said Jesseca Whalen, a Coldwater Creek copywriter.
Like many clothing retailers, Coldwater Creek was hit especially hard by the 2008 recession. As household budgets tightened, consumer spending simply didn’t keep up with most of Coldwater Creek’s price ranges. After failing to turn a profit for five years running and suffering a particularly brutal third quarter last year, Dean said it was clear drastic measures were needed to get the company back on the rails..
In October, officials announced they were pursuing strategic alternatives — either a sale or some other influx of capital — to stabilize business. Shortly after the announcement, the company cut 20 percent of its corporate workforce expenses. However, the efforts were in vain, Dean said.
“At times there were signs of progress, but ultimately, we couldn’t find a buyer,” she said.
Business improved in the fourth quarter of the fiscal year, Dean said. Nevertheless, it wasn’t enough to keep the company going.
“We believed we were on a good path, but unfortunately, we ran out of sources of capital and we ran out of time,” she said.
The company has secured $75 million in debtor-in-possession financing from Wells Fargo as stores begin to sell off inventory. When paired with early May sales dates — traditionally a strong time of sales for the company — officials foresee liquidation taking several months.
Finally, the process of shuttering storefronts and shutting down websites will begin.
The closure plans are a sad outcome for employees and community members alike, Dean said. Coldwater Creek defined itself over the years as a proudly local company even as it grew to global significance. In the process, the company supported numerous local nonprofits and organizations, including Panhandle Alliance for Education, the Festival at Sandpoint, the Lake Pend Oreille School District, the Sandpoint Backpack Program and more. Coldwater Creek’s loss leaves a hole in both employment and local activism that won’t be easy to fill.
“It’s been a horrific day here, but we’re proud of our community and our associates,” Dean said. “We’re just very sorry this is the end of our story.”
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