Coldwater Creek remained profitable in 2001, thanks in large part to cost efficiencies. But its total sales fell by 16% during the fourth quarter, and its direct sales by an even greater percentage.
And despite a sales boost in February, cost-control is still so tight that the firm has frozen paychecks at their 2001 levels. In addition, founders Dennis and Ann Pence have decided not to take salaries this fiscal year.
The Sandpoint, ID-based catalog company reported total sales of $464 million for the year, a 1.2% increase over 2000. Sales for the quarter totaled $116.6 million for the quarter, a 16.4 decrease.
Those percentages improved when an extra week in the fourth quarter was taken into account.
The quarter and fiscal year ended on March 2.
Net income for the year totaled $1.8 million, compared with $13.2 million during the prior year. There was a net loss of $2.5 million during the quarter, compared with net income of $.8 million last year.
Direct sales fell by 5.5% to $400.8 million for the year. However, these results were affected by a 26.6% drop during the fourth quarter to $93.2 million.
Internet sales, which contributed almost 40$ of the direct channel’s sales, fell by 14.5% during the quarter. But they increased by 27.7% during the year. Totaling $144.2 million. 36% of the channel’s net sales, compared with 26.6% in 2000.
Overall direct sales fell in large part because of a 12.3% decline in catalog circulation for the year and 39.4% for the quarter, according to the company.
The direct sales percentages were also affected by the extra week in 2000.
“Three key elements contributed to our lower-than-anticipated net loss for the fourth quarter and enabled us to maintain profitability for fiscal 2001 as a whole: our company wide focus on cost controls, lower return rates due to quality improvements in our merchandise assortments, and increase customer response in late February,” said CEO Georgia Shonk-Simmons in a statement.
Gross profit totaled $41.1 million for the fourth quarter 35.2% of net sales), compared with $56.9 million (40.9% of net sales) during the same period in 2000.
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