Loyal readers know Coldwater Creek. In 2010, Lairig Marketing created a faux stock index of companies we felt had strong marketing strategies and operations. CWTR was the first. And the worst.
We “purchased” the stock in May, 2010 just above $6 a share. It ended the year with a 50% loss. Out of curiosity, I looked up the price yesterday. I’m embarrassed to say Coldwater Creek is even further downstream.
With a stock price of $1.25, and revenue falling by double-digit percentages, this company easily qualifies for our “How Would You Save [company name]?” series. Where did we go wrong?
Back then, we were impressed with Coldwater Creek’s increased marketing spend in the fourth quarter of 2009, a big gamble. Little did we know it would subsequently CUT spending across all of 2010. For God’s sake, CWTR reduced the number of catalogs it mailed to customers by 10% !
We cheered the company’s progress in raising sales by 20% in Q4 2009 via catalogs and the Web. Little did we know, this momentum would be the biggest lost opportunity an apparel retailer in the modern day could suffer. Direct channel sales DECLINED in 2010.
We applauded Coldwater Creek’s decision to limit its constant price-off posture. Little did we know it would keep prices high for clothes that female customers would reject, calling them “matronly.” Oh dear.
The company knows it is DEFCON 1 time. Here is what it said in the 2010 annual report:
“We recognize that we need to reposition the Coldwater Creek brand and communicate to our customer that we are changing.”
Well, then, where is the DEFCON 1 response? Here we are in July, and nothing much at all seems to have changed about this brand.
Hard to imagine the lights going out on a $1 billion company, but take a look at Talbots for a reference on the brutality of the women’s apparel business. Roughly the same size company, fighting for its life.