Spokane Journal of Business

Coldwater Creek plans more stores

‘Multi-channel’ strategy also calls for e-commerce to make up 30% of sales

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Coldwater Creek Inc., the Sandpoint, Idaho-based retailer that started with catalogs and last year exploded onto the Internet and doubled to four its number of full-line retail stores, expects to open four to six more stores in its next fiscal year, which starts in March.

The company also continues to fine-tune its catalog offerings, with a new jewelry catalog that debuted in time for the 1999 Christmas season, refinements to a home-furnishings catalog introduced last year, and consideration of a new womens apparel catalog.

We want to be there, wherever our customer wants to shop, Coldwater Creek spokesman David Gunter says. The company describes its strategy that encompasses catalogs, e-commerce, and stores as multi-channel retailing, and Gunter says that strategy is now hitting on all cylinders.

New stores

Coldwater Creek, which previously had operated full-line retail stores only in Sandpoint and Jackson Hole, Wyo., as well as 13 outlet stores scattered across the country, started looking last year at about 40 different locations across the country where it already has a pre-existing critical mass of customers as potential sites for new full-line stores, Gunter says. In November, it opened a 13,000-square-foot store in Seattle and a 7,000-square-foot store in Kansas City, Mo., both of which have performed above company expectations, he says.

Additional stores planned for fiscal 2000 probably would be about the same size as the Kansas City store, Gunter says. Coldwater Creeks most recent quarterly report filed with the U.S. Securities and Exchange Commission says lease improvements and initial inventory to open each planned store likely would cost between $2 million and $4 million.

The company for some time had anticipated opening additional stores in areas where it had a strong customer base, but now physical stores are becoming a more important part of Coldwater Creeks overall brand-building strategy, Gunter says. Earlier stores, although located in resort areas that exemplified Coldwater Creeks natural and sophisticated image, essentially were places for catalog customers to touch and try on familiar products, he says. The new urban stores, which have water features and tile floors imbedded with brass logos, are part of an effort to make a lasting impression on customers wherever they see the Coldwater Creek name, whether at a store, a web site, or catalog, he says.

More catalog efforts

Coldwater Creek Jewelry, which made its first appearance last Christmas, was well received and will become a holiday regular, Gunter says. He says the first issue of a new catalog often isnt profitable, and usually even new catalogs with good potential require revisions before they achieve optimum results.

This was profitable straight out, he says, adding that the jewelry catalog was particularly popular with men buying gifts.

Gunter says the company always is looking for new catalog opportunities and specifically is exploring possibilities for another womens apparel catalog.

He says Spirit of the West, the companys catalog featuring upscale womens apparel and accessories, had faltered in the past two years, but now is back on track with a revised selection of merchandise.

Coldwater Creek Home, a home-furnishings catalog launched last summer when a greater mix of items was added to what had been sold in the companys Bed & Bath catalog, continues to evolve, Gunter says. He says the company is limiting its selection of large furniture pieces, such as hardwood bedroom furniture and distressed leather sofas in that catalog, in favor of smaller, more popular items, including rugs, lamps, tabletop accessories, wall dcor, and bed and bath items.

On the web

Coldwater Creeks Internet sales have grown to about 12 percent of the companys total sales, up from about 0.1 percent a year ago, when only a limited number of clearance items were available for sale on the companys web site, Gunter says. Coldwater Creek made its entire inventory available on line last July.

Gunter says Internet sales are growing at about 1 percent of total sales each month and are expected to make up 25 percent to 30 percent of the companys total sales by the end of its next fiscal year in February 2001.

The companys average Internet order is larger than the average catalog order, and the Coldwater Creek web site is attracting new customersparticularly women between the ages of 25 and 35, while catalog shoppers tend to be between 35 and 55rather than just changing the way current customers order, Gunter says. Internet use has lowered Coldwater Creeks overhead cost for paper, printing, and mailing, and has eliminated the demand for a third call center the company expected to need by now, he says.

Coldwater Creeks web site also includes interactive search features, live chat customer service, and a personal shopper page that suggests gifts or outfits for special occasions.

  • Anita Burke

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