Coldwater Creek Inc. will hold an auction Thursday to determine the best offer to run the sales, followed by a hearing Tuesday to seek court approval of the winning bid. The company intends to start the sales by next Thursday, May 8. Mother's Day is Sunday, May 11, and the period leading up to it has typically been a key sales time for the bankrupt company.
U.S. Bankruptcy Judge Brendan Linehan Shannon in Wilmington, Del., has approved guidelines that will govern the auction. Liquidators Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC are the lead, or stalking-horse bidders, guaranteeing recovery of about 97 percent of the cost of inventory based on an estimated value of $90 million to $100 million, according to court papers.
Coldwater on April 11 joined women's clothing chains Dots LLC and Ashley Stewart Holdings Inc. and discount fashion retailer Loehmann's Holdings Inc. in bankruptcy after sales declined and losses mounted in the wake of the U.S. recession.
The Sandpoint-based company, founded as a catalog business 30 years ago, listed assets of $278.5 million and debt of $361.3 million in Chapter 11 papers.
Coldwater revised the sale agreement to exclude leasehold interests, intellectual property including customer lists, and seven day-spa stores from the initial liquidation after negotiating with its committee of unsecured creditors.
The company will select a lead bidder for the IP assets Thursday and will entertain offers until May 19. It would hold a May 20 auction if it receives more than one bid, followed by a May 21 hearing to seek approval of the sale. The sale process for the day spas would follow essentially the same schedule.