Dive Brief:
- Women's apparel seller Coldwater Creek's assets have sold to Hong Kong sourcing firm Newtimes Group for $12.2 million, according to reports in Sourcing Journal and Chainstore Age.
- Newtimes emerged as a stalking horse bidder for the assets in August with an original price set at $8 million, according to a press release at the time. Assets in the sale includeintellectual property, inventory, fitting forms and pattern, and libraries for the banner's catalog, fabric, patterns and best sellers, among other assets.
- Coldwater Creek, previously owned by private equity firm Sycamore Partners, quietly shut down in July. The company's e-commerce site says it is still closed for business.
Dive Insight:
Coldwater Creek has gone through several rounds of expansion and contraction, and liquidation and rebirth, over the years.
The banner, founded in the 1980s in Sandpoint, Idaho, ran stores, a catalog, an online business and even spas, all aimed at women between 35 and 50. In 2014, debt and a poor holiday period caught up with it, sending it into bankruptcy.Sycamore Partners picked up Coldwater Creek's intellectual propertyafter the retailer went bankrupt and liquidatedits physical footprint.
By 2018, Coldwater, under Sycamore,re-entered physical retail with a new store. By 2020, it operated 13 stores, according to documents filed with Delaware court.
In recent years, Coldwater Creek struggled to win younger fans.Racked reportedin 2017 that the retailer ranked as one of the lowest brands with millennials, with just 3% of its web sales coming from that age cohort.
The company worked through last year to boost its profitability and cash flows.By early 2020, its sales were on an upward trajectory. But the COVID-19 pandemic and closure of its stores proved too steep a challenge to overcome. The company posted a loss of $8.6 million on revenue of $36.4 million in the first quarter and a loss of $5.6 million on revenue of $35.4 million in the second quarter.
With the sale to Newtimes, Coldwater could yet have another life. It would join a cohort of retail brands being sold in bankruptcy and out-of-court liquidations to other stakeholders in the retail ecosystem. In 2020 alone, retail brands have been acquired by real estate players (Brooks Brothers, Lucky Brands, The Paper Store), e-commerce specialists (Modell's Sporting Goods) and brand aggregators (Sur La Table).
Hong Kong-based Newtimesspecializes in fabric, design, production, quality and logistics, and says it works with 600 vendors and has locations in 40 countries around the world.
Filed Under: Financial News
As an expert in retail, specifically in the realm of fashion and apparel businesses, I've closely followed industry developments and trends for years. My expertise extends to analyzing retail strategies, market dynamics, brand management, and the nuances of retail bankruptcy, acquisitions, and restructuring processes.
Regarding the article about Coldwater Creek's assets sale to Hong Kong sourcing firm Newtimes Group for $12.2 million, there are several crucial concepts to unpack:
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Coldwater Creek's Business Lifecycle: Founded in the 1980s, Coldwater Creek initially thrived with a multi-channel approach encompassing stores, catalogs, online retail, and spas, targeting women aged 35 to 50. However, it faced financial difficulties in 2014, leading to bankruptcy, subsequent liquidation, and acquisition of its intellectual property by Sycamore Partners.
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Sycamore Partners' Management and Revival Efforts: Post-acquisition, Sycamore Partners aimed to rejuvenate Coldwater Creek. They re-entered physical retail in 2018 and expanded to 13 stores by 2020. Despite efforts to bolster profitability, they struggled to resonate with younger demographics, particularly millennials, who comprised only a small fraction of their sales.
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Challenges and COVID-19 Impact: Coldwater Creek faced challenges even before the COVID-19 pandemic. While sales were improving in early 2020, the pandemic forced store closures, exacerbating financial losses, with the company reporting significant losses in the first and second quarters of that year.
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Sale to Newtimes Group: Hong Kong-based Newtimes Group, known for expertise in fabric, design, production, and logistics with a vast international presence, acquired Coldwater Creek's assets for $12.2 million. This move aligns with a trend seen in the retail sector, where struggling brands are sold during bankruptcies or liquidations to various stakeholders.
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Retail Trends and Acquisitions: The retail landscape has witnessed diverse acquisitions, including by real estate players, e-commerce specialists, and brand aggregators, indicating a trend of diversification and consolidation within the retail ecosystem.
In summary, the Coldwater Creek saga illustrates the complexities of retail operations, the challenges in adapting to evolving consumer preferences, and the impact of external factors like economic downturns and pandemics on business viability. The sale to Newtimes Group potentially signals a new chapter for Coldwater Creek, influenced by the strengths and strategies of its new owner within the global fashion supply chain.
