• by Sarah Mahoney  @mahoney_sarah, July 10, 2008

Women's apparel has been one of the hardest-hit categories in the recent retailing malaise, and Coldwater Creek is no exception. Same-store sales for the Sandpoint, Idaho-based retailer plunged 19% in the last quarter. But Coldwater Creek isn't blaming the customer or even the economy. It's blaming its clothes.

At the Oppenheimer's Consumer Growth Conference this week, Dan Griesemer, president and CEO told investors that the store had loyal customers who would be willing to spend their money with Coldwater if the product were better. So rather than increase its marketing spend--is renewing its focus on the clothes in an effort to bring those customers back.

"We've been focused on the same customer the whole life of the company--women between 45 and 65, earning $75,000 and up," says Griesemer. "She's a wonderfully loyal customer, and there's long-term growth in this segment, as the Baby Boomer bubble is just now entering our sweet spot."

"The way we go about running the business has to change," he says, adding that the new focus is on product selection, inventory, and managing growth.

The retailer is paying the most attention to pants and novelty jackets, which typically account for 50% of sales, as well as tops used in layering. The problem in the past, Griesemer says, "is that we lost our way a little. We became a little too much like last year, and repeated things that had worked. What she comes and visits us, we want the selection to be the most compelling."

Griesemer also says growth will be somewhat slowed, from about 65 stores annually to 40. "Right now, we have a little over 300 stores, and we see the opportunity for 500 to 550. But a reduced store opening cadence is appropriate to maintain that growth and do it prudently."

The company will also continue to avoid national print ads in women's magazines, particularly offering coupons.

"That worked very well for several years, but we found that kind of overall discounting was eroding our performance, and compounding the problem of product missteps," he says.

Catalogs have also been reduced, he adds. "We will be in the mail as often as we have been for our best customers, but with fewer pages."

The company doesn't see the economy getting better anytime soon. Still, says Griesemer, "the demographic tailwind is moving an increasing number of customers into our space. And women will continue to shop for clothes, and want things that can make them look beautiful," he says. "So we're heads-down, focusing on what we can control."