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$4.08 0.21 (5.43%)
10/10/2008 4:00 PM

Coldwater Creek, Inc. (CWTR)

CAPS Rating:
***

The Company is a retailer of women's apparel, accessories, jewelry and gift items. Company's proprietary merchandise assortment reflects a sophisticated yet relaxed and casual lifestyle.

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Avatar NetscribeRetail (80.57) Submitted: 12/28/06 5:53 AM : Outperform Start Price: $24.83 CWTR Score: -45.71

Coldwater Creek, Inc. is a specialty retailer of women’s apparel, accessories, jewelry, and gift items in the United States and operates in two segments namely retail and direct. The Retail segment consists of the company’s full-line retail stores, resort stores, and outlet stores. Direct segment consists of its catalog and internet-based e-commerce businesses. The company targets women who are 35 years and older with average household income in excess of $75,000. Coldwater Creek has 238 full-line stores and 25 outlet stores across U.S.

Baby boomers today comprise 29% of the U.S. population. With more disposable income and longer life spans, many U.S. retailers are targeting the valuable segment. Women from baby boomers generation outpace average women apparel spending by 13%, which augurs well for the company. Also company has presence in states where majority of baby boom population resides. The recent performance of the company has been remarkable with generous increase in the top-line. Retail segment that forms major fraction of the sales mix grew by whooping 48%. Establishment of a huge 1 million square feet distribution centre provides additional capacity to provide for company’s long-term target of operating 500 stores. The company is upbeat on direct sourcing which will drive their gross margins in future.

Excellent results have impelled the management to estimate massive double-digit annual top-line growth. Coldwater Creek has been aggressively undertaking promotional activities leading to a massive increase in its customer base. The store opening momentum is very much alive with about 37% store growth expected by the end of this fiscal. Annual revenue growth is also showing a rising trend. Being a zero-debt company, it is expected for Coldwater Creek to do well, which envisages an investor friendly environment.

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Avatar NetscribeRetail (80.57) Submitted: 4/16/07 4:41 AM

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Coldwater Creek (CWTR) scrip took a beating recently owing to the merchandising miscues in the fourth quarter of 2006 that declined the customer traffic in their stores. Despite posting over 29% higher revenues in this period, bottom-lines suffered on account of increased markdowns and promotions related to clearance activity. Barring the last quarter results, this women apparel retailer has been one of the star performers in the industry as it managed to grow its annual sales and profits handsomely by banking on the lucrative U.S female baby boomer market.

Looking ahead, store-opening plan looks pretty aggressive as the company plans to open 65 more stores in fiscal 2007 thereby expanding its geographical presence. Customer traffic has lately improved as the company has updated its summer merchandise offerings, which arouses positive sentiments for the coming first quarter performance. In order to better their in-store environment, CWTR has plans in the offing to innovate floor layouts. This could improve the shopping experience of their customers and drive traffic.

Encouraged by the positive impact of direct sourcing on the gross margins in fiscal 2006 management plans to directly source 50 percent of their merchandise purchases by the end of fiscal 2007.Also, company’s new ‘Spirit’ collection that includes jackets and skirts has received good response in the market and could fuel the growth prospects. In the light of these factors, CWTR is expected to surpass the market returns in the near future.

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