Was 2012 Coldwater Creek's Turning Point?

2012 is nearing its end, and now's a good opportunity to look at what happened throughout the year to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.

Today, I'll look at Coldwater Creek (NASDAQOTH: CWTRQ  ) . Over the past several years, the women's retailer has seen its stock plunge, but it recent jumped to its best levels in more than a year. Could a true recovery finally be in the works for the company? Below, you'll find more on what moved shares of Coldwater Creek this year.

Stats on Coldwater Creek

Year-to-Date Stock Return

13.3%

Market Cap

$163 million

Revenue, Past 12 Months

$746 million

Net Loss, Past 12 Months

($74.7 million)

1-Year Revenue Growth

(6.8%)

CAPS Rating

*

Source: S&P Capital IQ.

Why has Coldwater Creek been heading up?
Throughout much of the year, Coldwater Creek continued its trend of falling revenue and bigger net losses. Given the difficulties that the U.S. economy has faced recently, that may not seem all that surprising, but many of its peers made substantial progress toward turning things around. Chico's (NYSE: CHS  ) suffered similar problems but managed to rediscover what customers wanted at the same time as cutting back on margin-squeezing discounting practices. ANN  (NYSE: ANN  ) , the company behind Ann Taylor, has recently seen both sales and profits soar, while even long-suffering Gap (NYSE: GPS  ) made a big comeback when it found its fashions once more in style and in demand.

In order to keep going, Coldwater Creek took money from private equity firm Golden Gate Capital, and when its share price got low enough to trigger de-listing warnings from the Nasdaq, the company did a 1-for-4 reverse split. The split, along with an analyst upgrade of the stock, finally let Coldwater hit bottom -- at least for now.

Since then, shares have pushed substantially higher. Coldwater's most recent earnings report wasn't nearly as bad as analysts had expected, with a narrower loss. Moreover, with news that founding CEO Dennis Pence will retire in favor of incoming CEO Jill Brown Dean, investors seem optimistic that the company could finally be turning things around.

Coldwater Creek has sunk so far that any return to success could send shares soaring. That's far from a sure thing, though. With J.C. Penney (NYSE: JCP  ) having bought out the boomer-oriented Liz Claiborne brand recently, Coldwater Creek still needs to demonstrate it can compete in a tough industry environment.

Is traditional retail dying?
Coldwater Creek doesn't share a lot in common with J.C. Penney, but both have had trouble putting their comebacks together. Learn whether J.C. Penney is a buy today in our new must-read report on the company, in which we examine its turnaround attempt and gain some insight on the retail industry more broadly. Simply click here now for instant access.

Click here to add Coldwater Creek to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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  • Report this Comment On December 24, 2012, at 2:26 PM, kamee73 wrote:

    Decent and non bias info- agree for the most part.

    I expect it to be a winner in 2013/14 otherwise invest firms like golden gate will Not lend them money. With a good holiday season, it might happen sooner than later..............

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