Coldwater Creek Inc., the Sandpoint clothier that blended women’s apparel and lifestyle into a successful venture, filed for bankruptcy Friday.
The company plans to sell off inventory at a discount, shutter its 350 stores, and erase the jobs of 5,500 people, including 340 in Sandpoint and 110 in Coeur d’Alene.
The company launched by Dennis and Ann Pence in 1984 as a catalog business grew into a nationwide clothing retailer with stores, day spas and glossy catalogs with models sporting women’s fashions, accessories and gifts.
But the recession and a ruthlessly competitive retail apparel sector left Coldwater Creek reeling for the past seven years. The company trimmed costs, cut the number of employees and closed stores for the past two years yet continued to lose money.
Company executives said Friday they were unable to find a buyer or an investor to keep the business afloat.
The company’s bankruptcy filing in the U.S. Bankruptcy Court in Delaware lists assets worth $278.5 million and debts of $361.3 million.
“Making the announcement today has been a very difficult process,” said Jim Bell, Coldwater Creek’s chief operating officer. “On top of all the feelings, I am extremely grateful to every one of our associates and employees.”
Most employees will continue working for up to 60 more days and receive paychecks for that period. A number of employees will be retained beyond 60 days to help wind down the operations.
Sandpoint Mayor Carrie Logan spent much of Friday talking with other residents about the announcement. None had ever confronted an economic blow in the community of such scale.
“We really don’t want to see families leave our community,” Logan said, vowing to mobilize support so unemployed workers can find job placement help or counseling.
The news wasn’t unexpected.
“We saw the items in the paper. We knew the stock took a big dive two years ago,” she said.
Logan will work with other Bonner County business and government figures on recruiting new firms to Sandpoint. The group will try to attract companies looking for large commercial or light manufacturing space to consider using Coldwater Creek’s headquarters building — officially not in Sandpoint but inside the small nearby city of Kootenai.
City and county officials will seek grants worth $50,000 to help recruit a company looking to relocate to Bonner County.
“We will also look for ways to lease some of the city-owned land by the airport industrial park” in order to bring in new employers, Logan said.
Coldwater Creek hasn’t earned a year-end profit since 2006.
Bell said apparel retailers with brick-and-mortar stores all face a monumental market challenge as consumers want great deals but also tend to spend increasing amounts making online purchases.
The company’s plans to sell the buildings it owns in North Idaho won’t be decided for another few weeks.
The only shareholders expected to recover some of their investment in the Chapter 11 filing are two secured creditors. Golden Gate Capital, which provided funding to Coldwater Creek in 2012, has a secured claim for $93 million. Wells Fargo holds a credit lien for $37.5 million.
The company plans to offer closeout sales in stores and online.
Executives are seeking bankruptcy court to allow for liquidation sales before Mother’s Day to maximize sales for creditors, according to the filing.
Bell said the company also plans to hire a joint venture of Hilco Merchant Resources and Gordon Brothers Retail Partners to serve as inventory and asset liquidators.