The online apparel retailer’s filing for Chapter 11 bankruptcy protection has drawn several potential suitors, including rapper West and music executive Damon Dash, Karmaloop ...
Coldwater Creek and Christopher & Banks receive new credit lines to keep their operations running.
Two women’s apparel retailers in recent sales slumps have announced new financing arrangements.
Coldwater Creek Inc. has closed on a five-year, $65 million loan from Golden Gate Capital, and Christopher & Banks Corp. has entered a five-year revolving credit agreement of up to $50 million with Wells Fargo Capital Finance, part of Wells Fargo & Co.
Coldwater Creek, No. 134 in Internet Retailer’s 2012 Top 500 Guide, also announced it amended terms of $70 million in revolving credit with Wells Fargo & Co. and retired a separate $15 million term loan previously provided by the same institution.
“This strategic investment and partnership with Golden Gate Capital is a strong endorsement of our brand and turnaround strategy, and provides us with further financial flexibility to complete our near-term business objectives and accelerate our growth plans,” says Dennis Pence, chairman and CEO of Coldwater Creek.
Coldwater Creek’s first quarter direct and total sales were down. For the quarter ended April 28, Coldwater Creek reported:
- Direct sales, which include Internet, phone and mail orders, decreased about 13.1% to $38.7 million from $44.5 million in the same period last year. The company did not break out web sales.
- Comparable-store sales for the quarter declined 0.6%.
- Total sales were $169.9 million, down by 5.5% from $179.8 million.
- Net loss was $23.8 million, compared with a net loss of $30.0 million in Q1 2011.
Christopher & Banks (No. 296) says its new funding replaces a $50 million credit line that was scheduled to mature on June 30, 2014.
“This new credit facility will provide Christopher & Banks with enhanced liquidity and greater capital flexibility, with fewer covenants, as compared to the prior credit facility,” says Peter G. Michielutti, senior vice president and chief financial officer. “
Earlier this month Christopher & Banks rejected a second takeover bid by a minority investor.
On July 3 investment banking firm Aria Partners, which has about a 4% stake, said it was willing to pay $1.75 each for all outstanding shares of Christopher & Banks for a total purchase price of about $75 million.
Aria submitted an offer to acquire the company in May, but Christopher & Banks’ board rejected the deal, saying the bid was low and not in the best interest of shareholders. Aria then pressed for a new deal because of the retailer’s weakening financial situation.
In lieu of a takeover, Christopher & Banks said it would introduce new initiatives to jump-start sales and improve its financial position, including reducing the number of styles and SKUs to be offered in the fall, more effectively identifying pricing that will appeal to female shoppers, improving the flow of inventory in stores, and developing more targeted promotional campaigns.
For the first quarter ended April 28, Christopher & Banks reported:
- Total sales were $93.6 million, down by 15.2% from $110.4 million in the same quarter last year. Web sales were not released.
- Comparable-store sales decreased 15%.
- Net loss of $13.4 million, compared with a net loss of $8.2 million in the second quarter of 2011.