Business bankruptcy likely for Coldwater Creek

April 11, 2014 3:35 pm Published by

Keeping a business open depends largely on how much money customers are spending at the establishment. In recent months, two clothing chains, Loehmann’s Inc. and Dots LLC, have liquidated because of the sluggish spending of consumers. A third clothing chain, Coldwater Creek, is set to follow the other two chains in filing for bankruptcy and liquidating.

Coldwater Creek was started as a catalog business in 1984. The company enjoyed rapid growth for a period of time, but hasn’t been profitable since 2007. Five months ago, the company announced that it was looking into strategic alternatives to liquidation.

The value of the company’s liquidation could be as high as $176.8 million or as low as $100.9 million, according to a person who specializes in distressed investments. The company received a stalking-horse, which occurs when parties offer a minimum bid to sell off the chain’s assets and repay creditors.

Dropping sales were evident in the quarter that ended Nov. 2, 2013 for the retailer. The stores that were open saw a 17-percent decline in sales. The company’s shares have also declined to 20.5 cents, which is a 13-percent decline.

Learning that a business isn’t profitable is difficult, but business owners who make this discovery might have legal options available. Understanding the basics of business bankruptcy, such as how the process works and what will happen to the business, might help them to decide if bankruptcy is right for them. Learning about how business bankruptcies work from someone well versed in business bankruptcies in New York can help someone get answers to his or her questions.

Source: Bloomberg, “Coldwater Said to Plan Liquidation After Bankruptcy” Lauren Coleman-Lochner and Jodi Xu, Apr. 07, 2014

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