Even as positive sentiments are back again for business, especially with retail in the US picking up, many Indian exporters hit a setback recently when US based Coldwater Creek Inc., having 365 stores and employing about 6,000 people, announced that the company and all of its US subsidiaries have filed voluntary petitions under Chapter 11 in the US Bankruptcy Court in Wilmington, Delaware, in order to facilitate an orderly wind-down of its operations.
Many exporters, especially in the Delhi-NCR are worried not only about future, but even about present as many shipments worth crores which were ready for dispatch are lying unwanted. According to concerned industry watchers, “Exporters and even the local agency handling the account are trying to coordinate with other retailers and buying houses so that these shipments can be purchased by other retailers/buyers. Exporters are also worried about the orders which are in the process. Some buying houses are also helping these exporters for these ready stocks. Over a year back the India office of company was closed down and the Hong Kong office is also closing down this month. Creek is liquidating assets, which is worrisome, as normally in chapter 7 that is done when there is bankruptcy. This is chapter 11 which is financial restructure and not bankruptcy.
In December, when the firm posted third-quarter results, the net loss widened to US $ 23.8 million from a net loss of US $ 20.5 million, in the comparable period a year ago. Net sales fell 17.9 per cent to US $ 154.5 million from US $ 188.1 million. The last time it posted a quarterly profit was the second quarter of 2010. The last time it posted full-year profits was in 2006. The company was expected to file fourth-quarter and full-year results around March 5, but never did. It plans to wind down its operations over the coming months and begin going-out-of-business sales in early May, before the traditionally busy Mother’s Day weekend. It was not able to find a buyer or source of capital to provide adequate liquidity to fund a turnaround. “While we are extremely disappointed with this outcome, the company’s declining liquidity position and the challenging retail environment, together with the fact that we have exhausted all other possibilities, requires that we take this action,” said Chief Executive Jill Dean.
