Coldwater Creek Inc., the Sandpoint womens clothing retailer that hasnt been profitable since 2007, may seek bankruptcy protection as soon as this week, according to three people with knowledge of the matter.
The company might seek to liquidate its assets in order to repay its creditors, said the people, who asked not to be identified because the matter isnt public. The filing would come five months after Coldwater said it was exploring strategic alternatives, including putting itself up for sale.
Coldwater Creek's stores include one in the Treasure Valley in the Boise Towne Square mall.
Coldwater is the latest casualty of slowing mall traffic, where consumer caution has pushed stalwarts such as pizza seller Sbarro and clothing merchant Dots to seek protection from creditors. Sales at Coldwater stores open at least a year, considered a key gauge of retail performance, plunged 17 percent in the quarter ended Nov. 2.
The company's stock has lost almost all of its value in the past four years. Shares were trading at 23 cents late Tuesday afternoon, up from Monday's closing of 16 cents. Coldwater has fallen since it traded above $34 in April 2010.
Sharon Stern, a spokeswoman for Coldwater with Joele Frank Wilkinson Brimmer Katcher, didnt comment immediately. Denise DesChenes, a spokeswoman for Perella Weinberg Partners, hired by Coldwater as a restructuring adviser, declined to comment.
Dennis Pence, a former Sony Corp. executive, and his then-wife, Ann, started the company as a mail-order business in their Sandpoint apartment in 1984, selling womens accessories and gifts. The company began opening stores in the 1990s.
Business doubled or tripled almost every year through the late 1990s, when Coldwater Creek went public. The retailer took to shopping malls, opening hundreds of stores where its target customers - educated women ages 45 to 65 with an average household income of $100,000 or more - could see, touch and try on items. The company had 379 stores as of Nov. 2.
Pence left the top job in 2007, returned in 2009 and left again in December 2012 after failing to restore profitability. Jill Brown Dean, then president and chief merchandising officer, succeeded him as CEO with hopes of achieving the long-sought turnaround.
Coldwater Creek employed about 7,000 people, including about 500 at its Sandpoint headquarters, as of January 2013. It had 379 stores as of Nov. 2.
The company, which hasnt announced when it will report its fourth-quarter results, has reported three quarters of losses totaling $59.6 million this fiscal year, according to data compiled by Bloomberg. It had a loss of $81.8 million last year.
Restaurant chain Sbarro sought bankruptcy protection this month after struggling with mounting competition in the fast- food sector and dwindling mall traffic. Clothing sellers have also faced challenges with Dots, a womens clothing chain with 400 stores, shutting down after filing for bankruptcy in January.
In 2012, an affiliate of Golden Gate Capital Corp. extended a $65 million senior secured term loan to Coldwater in return for preferred stock thats convertible to as much as 6.1 million shares of common stock, according to company filings.
The San Francisco-based private-equity firm has acquired or bought stakes in a number of troubled retailers. It bought Eddie Bauer out of bankruptcy in 2009 for $286 million.
News of the planned bankruptcy filing was first reported Monday by Dow Jones.
The Idaho Statesman contributed.