Don't let anyone try to kid you into thinking that you can't make serious money in the world of specialty retail. Over the past year Coldwater Creek (NASDAQ:CWTR) has seen its shares triple, and last night the company showed why. Despite being in the seasonal lull that usually finds apparel specialists posting a loss or simply treading water until the holidays kick in, Coldwater Creek was way in the black.

The company reversed a loss during last year's fiscal second quarter by posting $0.08 a share in earnings on a 15% uptick in sales this time around. But if you want to fish in this Creek, you better bring a salmon net.

Flopping against the current of traditional retailers that have branched out into selling direct to consumers through catalogs and websites, Coldwater Creek has been scaling back its flagship mail-order business in favor of the physical storefront.

Over the past year, while the company has reduced its catalog circulation by 32%, its retail store count has grown from just 48 to 89 units. Yet despite the whirlwind, the most amazing nugget from the company's July quarter result was that it was actually able to reduce its inventory levels.

Think about that. Here's a company opening -- and stocking -- dozens of new stores while growing sales overall, yet it still managed to be stuck holding less merchandise this time over last summer.

In a business that is both fickle and seasonal, bloated inventories make for ugly fashion. Those companies usually wind up with margin-slashing clearance sales to clear out unwanted wares. These days, Coldwater Creek is clearly wanted. Gross margins are higher, and it's also growing sales from its website despite the reduction in catalog mailings.

No one is saying that this is the next Sears (NYSE:S), given how that eventual giant had modest mail-order roots. How well the company's eclectic mix of apparel, accessories, and home decor items mesh in a small store over a wider catalog remains to be seen over the longer haul. I mean we're talking Chico's (NYSE:CHS) and miniature Pier 1 (NYSE:PIR) tossed into a blender and whipped up. Will it work? So far it has.

That is why in the near term the company's outlook is compelling and promising. You can go up this Creek without a paddle as it seems to be coasting just fine on its own.

Have you ever thumbed through a Coldwater Creek catalog or checked out one of its stores? Do some people wear some colors better than others? Do I match? All this and more in the What to Wear? discussion board. Only on

Longtime Fool contributor Rick Munarriz has browsed through Coldwater Creek catalogs, but he can't recall ever setting foot in one of its stores. He does not own shares in any of the companies mentioned in this story.