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Coldwater Creek completes $70mn revolving credit facility
10
Jul '12
Coldwater Creek Inc. announced the closing of a five-year, $65 million senior secured term loan provided by Golden Gate Capital, a leading private equity firm with extensive experience in the retail sector. The Company also announced the completion of an amendment to its $70 million revolving credit facility with Wells Fargo Capital Finance, part of Wells Fargo & Company, which matures on May 16, 2016.

"We are pleased to announce this strategic investment and partnership with Golden Gate Capital, which is a strong endorsement of our brand and turnaround strategy, and provides us with further financial flexibility to complete our near term business objectives and accelerate our growth plans," said Dennis Pence, Chairman and Chief Executive Officer of Coldwater Creek. "Golden Gate Capital brings a highly flexible investment approach and extensive retail expertise, which will be beneficial in the continued revitalization and long-term growth of Coldwater Creek."

Golden Gate is one of the most active private equity investors in the retail and restaurants sector. Some of the firm's retail portfolio companies include Eddie Bauer, J.Jill, Zales and Express. Over the last 12 months, Golden Gate has also announced investments in California Pizza Kitchen, Pacific Sunwear, and Payless ShoeSource (pending).

"Coldwater Creek is a strong brand that has undergone significant changes over the past year to reposition its core offering and now, with a solid foundation in place, is realizing the benefits of these changes," said Josh Olshansky, Managing Director of Golden Gate Capital.

Neale Attenborough, Golden Gate's retail group Operating Partner who will join Coldwater Creek's Board of Directors, added, "We look forward to working closely with Coldwater Creek's talented management team as they return the Company to profitable long-term growth. We believe that the initiatives currently underway, supported by our investment, give the Company's management team the necessary time and added resources to successfully execute on its plan."

Golden Gate's senior secured term loan is collateralized by a second lien on the Company's inventory and receivables, and a first lien on the Company's remaining assets. In addition to interest and fees payable on the loan, the Company issued convertible preferred stock to an affiliate of Golden Gate, which gives it the right to purchase up to 19.9% of the Company's common stock (16.7% on a fully-diluted basis) at an exercise price of $0.85. Golden Gate also received the right to appoint two members to Coldwater Creek's Board of Directors. The second Golden Gate Board member to be appointed will be announced at a later date.

In conjunction with the closing of the Golden Gate term loan, the Company has completed an amendment to its $70 million revolving credit facility with Wells Fargo Capital Finance as well as the retirement of a separate $15 million term loan previously provided by Wells Fargo.


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