Coldwater Creek’s creditors are at a loss to understand why sales boomed in the wake of its bankruptcy filing, but it’s not a mystery to the former retailer’s target customers.
Decent quality, decent prices and humane tailoring for women who are not 25 years old and/or a size two is a rare commodity. Coldwater Creek launched in the Midwest some 30 years ago and catered to mature, educated women. The line caught on among a crowd of people, including professional women, who didn’t have the time or patience to go from store to store to find comfortable classics. No muumuus. No sequins unless it’s a holiday garment. Not necessarily black. And if it’s something that’s been around five years or so, that doesn’t mean it’s out of style. That means it works.
When Coldwater Creek shoppers found out the company was going under, they stocked up, according to Massachusetts attorney Alanna Cline, who identified herself as “a very satisfied and needy customer—notwithstanding the decline in quality and design over the past couple of years.” The prospect of saving a couple more bucks at going-out-of-business sales wasn’t worth the risk that favorite items would be sold out, it seems. “Fear and need” drove a run on the Coldwater Creek website, according to Ms. Cline.
“Knowing how long it took me to find CWC, I have been racing to purchase a couple years’ worth of clothing,” Ms. Cline told Bankruptcy Beat. “It would take me at least that long to find some reasonable alternative.”
She’s not the only one, as shopper laments posted on the Coldwater Creek website demonstrate. “I truly do not know where I will find clothes that I like, wear well and look new after years of wear,” wrote shopper Suzabell.
That could be why sales outstripped management’s projections in the weeks between the company’s April bankruptcy filing and when liquidators launched the final sales. The official committee of Coldwater Creek’s unsecured creditors is questioning why management’s sales projections fell so far short of actual sales in the weeks between the bankruptcy filing and the time liquidators marched in to sell off the remaining inventory.
In court papers, creditors have raised suspicions that Coldwater Creek low-balled its sales projections to justify hefty bankruptcy financing, paying fees on loans it didn’t need in light of the cash flow from the sales boom. Wells Fargo, the company’s bankruptcy lender, has said the projections appeared reasonable at the time, given Coldwater Creek’s history of declining business. Coldwater Creek denies the allegations, accusing its creditors of hurling “numerous false accusations against the debtors and other parties, based upon nothing more than speculation and unwarranted suspicion.”
Coldwater Creek devotees, in the meantime, have turned to eBay to pick up suddenly-scarce wardrobe staples. Used items are being snapped up at the original retail prices, as the defunct retailer’s mature, educated target customers strive to delay the inevitable day when they’ll find themselves slogging through unfamiliar racks looking for something comfortable, reasonably priced, well-made, not necessarily black, and in sizing where “large” does not mean a size 10.
As firefly1 commented on the retailer’s website, “We’ll miss you CWC!!!”
Write to Peg Brickley at peg.brickley@wsj.com.
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