-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
1/21
14thAnnual ICR XChange Conference 2012
Jill Dean, President and Chief Merchandising Officer
Jim Bell, Senior Vice President and Chief Financial Officer
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
2/21
SAFE HARBOR
2
The following information contains forward-looking statements, including statements regarding our
plans to revitalize our product appeal and improve our financial performance. These forward-looking
statements are based on Managements current expectations and beliefs, as well as a number of
assumptions, estimates and projections concerning future events. These statements are subject torisks, uncertainties, assumptions and other important factors, many of which are outside
Managements control, that could cause actual results to differ materially from the results discussed
in the forward-looking statements. You are cautioned to review the risks identified in our SEC
reports and not to put undue reliance on such forward-looking statements because actual results
may vary materially from those expressed or implied.
All forward-looking statements are based on information available to Management on this date, and
Coldwater Creek Inc. assumes no obligation to, and expressly disclaims any obligation to, update or
revise any forward-looking statements, whether as a result of new information, future events or
otherwise. We operate on a fiscal calendar widely used in the retail industry that results in a given
fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to January 31 of
the following year. For example, references to fiscal 2010 refer to the fiscal year ended January
29, 2011.
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
3/21
PREMIUM MULTI-CHANNEL SPECIALTY RETAILER
Retail
Catalog
E-Commerce 77% of total sales in Q3
2011
414 locations (1)
366 Premium
39 Outlets
9 Day Spas
LTM Q3 2011 circulationof 65 million
Key traffic driver forstores and e-commerce
21% of total sales in Q32011
Best in class performance
www.coldwatercreek.com
3
Coldwater Creek iscommitted to
creating a unique
and personal brand
experience that
reflects the multiplefacets of our
customers lifestyle,
recognizes her
individuality, and
delights her wi th
meaning andinspiration.
Coldwater Creek Today
Coldwater Creek Today
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
4/21
4
Typically between the ages of 45-65
Her average household incomeexceeds $75,000
She is college educated
She sees age as an attitude, not a
numberShe loves print, pattern and colorin her wardrobe
She is looking for fits that flatter
and styles that are age appropriate
OUR CUSTOMER
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
5/21
OUR HISTORY
5
Opened firs tpremium retail stores
Reached $1 billion insales and $520 in SSF
1999 2006
Successful store
growth period20092000
Product offering lost
focus2010 2011
Hired new managementteam to execute
turnaround
Historical TimelineHistorical Timeline
Note: Our fiscal year ends on the Saturday closest to January 31 of the following year.
Premium Store Sales Per Square FootPremium Store Sales Per Square Foot
Business outgrewdirect modelinfrastructure
$516 $520$456
$350 $336 $303
$-
$200$400
$600
FY 2005 FY 2006 FY 2007 FY2008 FY 2009 FY 2010
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
6/21
Phase 2
Revitalize productappeal
Restore the brandimage
Improve financialperformance
ROADMAP TO A TURNAROUND
Phase 1
Implemented inventorymanagement
disciplines
Begin to implementnew merchandisingdirection
Begin to roll out storeoptimization program
2011 2012 2013 & Beyond
6
Phase 3
Leverage supplychain efficiencies
Expand implementationof Made For Outletproduct strategy
Evaluate opportuni tyto grow out let storebase
Reevaluate smallermarket growth
opportunity
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
7/21
Revitalizing the ProductJill Dean, President and Chief Merchandising Officer
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
8/21
STRATEGIC ASSORTMENT ARCHITECTURE
Create collections with lifestyle focus
Offer the appropriate balance of fashionand novelty
Build penetration of opening pricepoints
Increase seasonal investment in color,print and pattern
Grow dresses, skirts, outerwear, andaccessories categories
8
Broaden Customer Appeal
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
9/21
9
Maximize top 30 styles and provenwinners
Invest in franchise fabrications andyarns
Consistently offer fashion essentialsthat are updated every season
Develop and execute against a rigoroustesting process
Maintain open to buy and ability tochase
BALANCE CATEGORYINVESTMENTS
Reduce Assortment Volatili ty
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
10/21
10
INVENTORY PRODUCTIVITY
Plan and execute to a higher regularpriced sell through
Reduce inventory depth
Narrow size offering in store
Increase freshness by adding miniflows
Full time in-store sale section toimprove inventory turnover
Increase Inventory Turnover
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
11/21
11
CROSS CHANNEL MERCHANDISING
Align brand-right messagingacross channels
Seasonal marketing campaigns
Major merchandise promotionsfocused on the Top 30 styles
Consistent execution of
compelling outfits with focus onthe target customer
Enhanced shopping experienceboth in store and online
Improved navigation throughmerchandising by lifestyle
11
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
12/21
BUILD SUPPLY CHAIN CAPABILITY
Grow direct sourcing penetration
Broaden vendor and country of origin base, reduce dependency on China
Improve speed to market and reduce cycle time
Design & develop into franchise fabrications & yarns, projected over multiple seasons
12
Reduce Unit Cost and Shorten Lead Times
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
13/21
Financial Highlights
Jim Bell, Chief Financial Officer
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
14/21
1414
Drive Gross MarginExpansion
Improve Cash Flow
Leverage Our Current CostModel
Optimize Store Fleet
KEY FINANCIAL INITIATIVES
Change Financial Architectureto Improve Performance
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
15/21
Restore gross margins via leaner inventory buys and higher regular price sell through
Mitigate costs and reduce sourcing cycle time by refining supply chain strategies
Deliver refined promotional and markdown strategy
Leverage realized reduction in occupancy and buying expenses
INITIATIVES TO DRIVE GROSS
MARGIN EXPANSION
15
Note: Our fiscal year ends on the Saturday closest to January 31 of the following year.
GROSS MARGIN44.6%39.1%
34.2%32.2% 31.3%
27.1%
20.0%
25.6%
31.3%
36.9%
42.6%
48.2%
FY 2006 FY 2007 FY2008 FY 2009 FY 2010 LTM Q3 2011
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
16/21
INVENTORY MANAGEMENT STRATEGY
Strategy for more frequent product flows and a renewed focus on product lifecyclesand seasonal timelines
Maintain open-to-buy positions and fill with trending categories
Maintain permanent sales section to speed inventory turn
Better buying = better inventory turns = better cash flow
Goal to increase inventory turnsto approach 5x per year.
16
INVENTORY TURNS
4.7 4.7 4.8 4.6
3.9
2.0
3.0
4.0
5.0
6.0
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
17/21
Removed approximately $125 million of SG&A from model from FY 2007 to LTM Q32011
Expect to reduce expenses an additional $5-10 million in Q4 2011
Highly leveragable expense structure provides significant opportunity for salesflow through to earnings with modest top line growth
HIGHLY LEVERAGABLE MODEL
17
$124.4Mreductionin SG&A
20072010SalesCAGR: (5.2%)
20072010SG&ACAGR: (8.7%)
($ in millions)
Note: Our fiscal year ends on the Saturday closest to January 31 of the following year.
TOTAL OPERATING EXPENSES
$387.1
$460.9
$396.8$373.5
$350.7
$336.5
36.7%
40.0%38.7%
36.0% 35.7% 42.0%
$250.0
$300.0
$350.0
$400.0
$450.0
$500.0
FY 2006 FY 2007 FY2008 FY 2009 FY 2010 LTM Q3 2011
30.0%
35.0%
40.0%
45.0%
50.0%
OperatingExpenses %toSales
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
18/21
OPTIMIZE STORE FLEET
Young retail fleet average ageis approximately 6 years
Opportunistically relocate and/orremodel to optimize store size
Close ~10% or 35-45underperforming stores in the nexttwo years
Store optimization program isexpected to yield approx $8M - $12Mincrease in pre-tax income
18
110 stores1120 stores
2130 stores30+ stores
8
4
9
4011
8
2
28
14
5
2
20 9
33
4
9
7
4
12
11
11
2
3
12
2
3
2
15
2
3
14
16
3
8
17
2
7
10
35
4
11
2
9
9
3
31
Current Store Locations
2011 2013 & Beyond2012
5 new stores / close 15 stores Close 15 stores Close up to 15 stores
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
19/21
19
Premium retail comparable salesdeclined 9% for November andDecember
Gross margin to improve 200 to 400basis points
Net loss per share of $0.18 to $0.24
Inventory to be down high teens
Q4 2011 OUTLOOK
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
20/21
COMPANY HIGHLIGHTS
New talent in place with extensive industryexperience to execute revitalized merchandisingstrategy
Proven multi-channel distribution model
Significant margin expansion opportunity as a resultof highly leveragable infrastructure
Significant investments made in people, processesand systems designed to drive future sales growthand margin improvement
High brand awareness developed through long historyof great product and stellar customer service
Exceptionally loyal and distinguished customerbase
20
-
7/29/2019 $CWTR Coldwater Creek Jan 2012 Corporate Investor ICR Presentation Slides Deck PPT PDF
21/21