Sandpoint, Idaho Following a dismal third-quarter performance, Coldwater Creek announced Monday that it would slash new store openings in 2009 by more than 60%. The retailer, which opened 43 stores this year (and 66 stores in 2007), expects to open only 15 stores next year.
“While we continue to believe in our retail-expansion strategy, we are reducing our store-growth plans for 2009 in light of the current market conditions,” stated Dan Griesemer, president and chief executive of Coldwater Creek. “We now plan to open approximately 15 new stores, down from our previous plan of approximately 40 new stores. Additionally, our analysis of any new store opportunity will take into account a higher hurdle rate as a result of the challenging retail environment.”
Coldwater Creek also announced Monday that third-quarter sales were expected to be approximately $225 million, which would reflect a decline in same-store sales in the low twenties. Same-store sales were down 19.0% in the first quarter and fell 13.7% in the second quarter.
At $225 million in sales, the third quarter would be the lowest-performing quarter of the 2008 fiscal year, following first-quarter sales of $271.1 million and second-quarter sales of $241.1 million. It would also be the worst third-quarter performance of the last three years, following third-quarter sales of $271.2 million in 2007 and $256.4 million in 2006.
However, Griesemer remained optimistic for the future and stated, “We remain confident in our overall business model and are committed to controlling expenses and managing inventory. We strongly believe that we are positioned to achieve improved results when consumer spending improves.”
He noted that Coldwater Creek had experienced a significant deterioration in traffic and sales beginning the second weekend in October, which he attributed to the “unprecedented consumer environment.”