Coldwater Creek to sell 26.5 million shares at discount

Sandpoint women’s clothing retailer Coldwater Creek Inc. said it will sell 26.5 million shares of common stock and raise roughly $21.1 million and use the money to push through a difficult business cycle.

In documents filed with the Securities and Exchange Commission, publicly traded Coldwater Creek said it’s likely to sell shares at 85 cents, a discounted price from Thursday’s closing price of 91 cents.

The company noted in its stock prospectus that it has struggled to maintain profits in a challenging retail climate.

Share prices during 2011 have fallen by more than 65 percent; the company faces possible delisting from the Nasdaq stock exchange if its stock price remains below $1 per share, the company noted.

Coldwater Creek noted that CEO and Board President Dennis Pence intends to purchase 8.35 million shares from the total sale. Piper Jaffray, the broker for the stock sale, has a 30-day option to buy 4 million common shares of stock.

The sale is expected to close on Monday.

The company said it will use the proceeds for general company operations, including marketing and capital costs.

Though its third quarter hasn’t closed, the company also noted that it expects to report net sales that are roughly 17 percent below those of one year ago. That equals a net loss of 30 to 36 cents per share, the company noted.

Analysts expected a loss of 28 cents per share on revenue of $190 million, according to a survey from FactSet, an aggregator of investment information.

The company said operating expenses rose because of its first national television advertising campaign. Selling stock to raise money poses the possible risk of diluting current stockholders’ shares.

Due to SEC rules covering public comments prior to a stock offering, company officials declined to comment or elaborate on the sale.