Coldwater Creek Inc. says it has put on hold completion of a planned $9 million office structure it began building in Coeur dAlene early this year and also has scaled back its retail-store expansion plans amid a continuing softness in the apparel industry.


The Sandpoint-based womens clothing retailer had expected to move its information-technology personnel into the planned, 100,000-square-foot building in north Coeur dAlene, located adjacent to its 60,000-square-foot call center there, but for now will keep them in the call center building, says Jeffrey Parisian, its vice president of administration.


Were not aggressively recruiting or hiring new people, Parisian says. Without an immediate need for the building, its not prudent to spend cash on it now.


The four-level building, which is being constructed by Spokane-based Lydig Construction Inc., is located at 745 W. Hanley. The structure is to have two floors of office space and two floors of parking, one above grade and one below. The shell of the building has been erected, and Lydig now is taking measures to weatherproof the unfinished structure, Parisian says.


It will be ready for interior improvements when we decide to proceed, he says, adding that such a decision could come sometime next year.


Parisian says Coldwater Creek also has decided to scale back its earlier plans to open 65 new retail stores this year, and instead now expects to open 45 to 50 stores. The company has about 300 full-scale retail stores and 30 outlet stores, and also relies on Internet and catalog sales.


In March, the company reported a net loss of $17 million, or 19 cents a share, for its fiscal fourth quarter ended Feb. 2, compared with net income of $15.9 million, or 17 cents a share, in the year-earlier quarter. The company says it expects its losses to continue through the second fiscal quarter of this year.


Coldwater Creek laid off 65 employees companywide in January due to lagging sales. Parisian says no further cutbacks are expected. As of Feb. 2, the company employed about 3,400 people full time and about 9,800 workers part time.


In its annual report released in early April, the company said, During fiscal 2007, we operated in a highly promotional retail selling environment accompanied by lower customer traffic and challenging macroeconomic conditions. These conditions, which have continued into the first quarter of fiscal 2008, have had a negative impact on our revenues, gross margins, and earnings. We believe these conditions will continue during the remainder of fiscal 2008.


In a telephone interview last week, Parisian said, This year is a transition period for the company and the industry as well. We feel weve adapted strategies going forward to address current conditions in a proactive way.


Ann Poole, an analyst at the New York office of Stephens Inc., a Little Rock, Arkansas-based firm, says the key for Coldwater Creek and other womens apparel retailers to pull out of an industrywide downturn is to come up with more exciting product lines.


The entire Missy space is struggling, she says. The big problem is poor product and lack of differentiation in everyones assortments. For whoever can get it right, theres a lot of opportunity out there.


Parisian says work will proceed on most of a planned 14,000-square-foot addition to Coldwater Creeks call center in Coeur dAlene, although some parts of that project also will be put on hold. An employee fitness area in that addition will be completed, he says, adding, We felt thats an amenity thats long overdue.


Because no major hiring is anticipated in the near term, Coldwater Creek has postponed the expansion of a cafeteria in part of the addition, Parisian says.


Earlier this week, Coldwater Creeks common stock was trading at about $5.30 a share, down nearly 80 percent from its 52-week high of $25.69 in June, but up from a low of $3.40 per share in January.


In addition to its headquarters in Sandpoint and its call centers there and in Coeur dAlene, Coldwater Creek, operates a 960,000-square-foot distribution center and a call center in Mineral Wells, W.Va., as well as retail stores in about 190 markets. It was founded in 1984, and had net sales of about $1.15 billion in its latest fiscal year.


Contact Mike McLean at (509) 344-1266 or via e-mail at [email protected].