In an unusually lucrative payoff, Coldwater Creek Inc. shareholders next week will receive a 50 percent stock dividendtheir second in eight monthsfrom the Sandpoint-based retailer.


Coldwaters board recently approved a 3-for-2 stock split that will be granted Sept. 8 as a stock dividend to shareholders of record on Aug. 18, says company spokesman David Gunter. Coldwater Creek also issued a 3-for-2 dividend Jan. 30, he says.


That means someone who had two shares of stock in January would have 4.5 shares after the latest dividend is issued, Gunter says. Stock dividends are paid at no cost to shareholders.


Stock splits have the immediate effect of lowering share price. Since Coldwater Creeks split at the end of January, however, its stock has climbed dramatically in price, and closed at about $17.60 a share Friday, a 52-week high.


Basically what weve done is to double our share count after the second split, Gunter says.


The reason is because Coldwater Creek needs more shares on the market to attract big institutional investors, Gunter says.


Such investors like to be able to buy and sell stock without impacting the stock price, he says. Thats hard, however, if a company doesnt have a large number of shares available for trading, or whats called in float, he says.


Before the 3-for-2 split in January, Coldwater Creek had about 10.8 million common shares outstanding, but only about 4 million of those shares were available for trading. The others were owned by company officialsColdwater Creek founders Dennis Pence and Ann Pence, for example, each own about 25 percent of the companys common stockand major investors.


After that earlier split, Coldwater Creeks outstanding shares increased to about 16.2 million, with a float of 7.4 million shares, Gunter says. Based on that move, We saw several new names come on board as major stockholders, he says.


After the Sept. 8 stock split, Coldwater Creek will have 24.1 million shares of common stock outstanding, and there will be 11.1 million shares in float.


Coldwater Creek anticipates attracting more big investors following the second split, he adds.


Gunter says Coldwater Creek may not be done beefing up its pool of outstanding shares.


Extremely large Wall Street names would have trouble getting as much stock as they want to, even with 11.1 million shares in float, he says.


Improving our liquidity and improving our attractiveness to Wall Street is a very high priority for us, Gunter says.


Coldwater Creek last week released stronger-than-expected second-quarter results. The company lost $1.4 million, or 6 cents a share, in the period ended Aug. 2, compared with a loss of $2.1 million, or 9 cents a share, in the year-earlier quarter. Analysts had expected Coldwater Creek to post a second-quarter 2003 loss of 7 cents a share.