Spokane Journal of Business

Coldwater Creek ends foray in Japanese market

After testing the waters, Idaho company pulls back

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Coldwater Creek Inc., the Sandpoint, Idaho-based direct-mail retailer, has pulled out of the Japanese market after testing it for about two years. The company, tucked away in North Idahos Selkirk Range, sells gifts, clothing, and home furnishings that strive to reflect a simpler time in American life, but its effort to enter Japan was torpedoed by the complex economic malaise circling the globe and particularly by the downturn in Asia.

With the economic turmoil, they couldnt afford our products, Don Robson, Coldwater Creeks vice president and chief financial officer, told Spokane Stock & Bond Club members at a luncheon earlier this month.

The company had printed catalogs in Japanese, hired customer-service representatives fluent in Japanese, and even instituted a separate packing line at its Sandpoint distribution center where packages to Japan were packed with meticulous care to meet Asian customers standards of orderliness. International sales, primarily in Japan and Canada, typically have accounted for only a small percentage of Coldwater Creeks net sales, less than five percent in fiscal year 1997.

Internet sales

Separately, Coldwater Creek is prepared to expand Internet sales, a currently small slice of its business. Robson says the company now sells some overstocked items through its Internet site and is beginning to do more business there. Even though Internet commerce has grown, he says customers dont seem to be turning in large numbers to on-line shopping for clothing and home furnishingsyet. Should cybershoppers become more interested in products such as those Coldwater Creek offers, the company is ready, Robson says.

We have the back office infrastructure in place and ready to build on, he says.

Coldwater Creek also will continue to build its catalog business. Robson says Coldwater Creeks Bed & Bath catalog, added in 1997, has performed well and will be expanded to include items for the rest of the house, such as more furniture and home accessories.

The company also plans to add plus and petite sizes to its apparel lines as an efficient way to increase its customer base, Robson says.

Meanwhile, Coldwater Creeks net sales continue to climb. It posted a more than 22 percent gain in net sales for its third fiscal quarter ended Nov. 28, compared with the year-earlier period. We are encouraged by the third-quarter results, Robson says, also noting that the progress was achieved in a difficult climate for apparel retailers.

For example, Nordstrom Inc., which competes for the same upscale customers Coldwater Creek targets, recorded sales growth of less than 1 percent in its third quarter, ended Oct. 31, compared with the year-earlier period.

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