Facing declining sales and a net loss for the year, Coldwater Creek Inc. said it will reduce its national advertising by approximately 70% this year and catalog circulation by approximately 20%.
For the fourth quarter ended February 2, Coldwater Creek posted net sales totaling $345.5 million, compared to $366.6 million in the prior year. Comparable store sales declined 19.2% during the same period. Direct sales totaled $119.3 million compared to $142.3 million in the same period last year.
The company’s net loss for the three-month period totaled $17 million, or $0.19 per basic and diluted share, compared with net income of $15.9 million, or $0.17 per diluted share, for the same period last year.
For the fiscal year ended February 2, net sales totaled $1.15 billion compared with $1.05 billion in 2006. Direct sales totaled $376.4 million compared with $390.4 million in 2006.
The net loss for the year totaled $2.5 million, or $0.03 per basic and diluted share, compared with net income of $55.4 million, or $0.59 per diluted share in 2006.
In order to try to turn around these numbers, Coldwater Creek said it has embarked on a series of corrective actions related to its product and customer experience. In addition to cutting back its advertising and catalog circulation, this includes trimming its SKU count by at least 20% and adjusting inventory in an effort to decrease markdowns. The company is also moderating its retail expansion in 2008 and plans to open 50 stores this year.