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Breaking Up With Coldwater Creek


In specialty retail, all relationships eventually come to an end.


Minyan Odie writes:

"What's the deal with Coldwater Creek (CWTR)? I remember you speaking well of them last year. The stock got hammered this week (after reporting terrible earnings and forecasting more of the same for the rest of the year). Is it a good time to buy?"

Odie, we don't do advice around here, which makes it difficult for me to properly express my complete and utter lack of enthusiasm for the idea of buying the dip on Coldwater. As I say too often, specialty retail is where love goes to die. Coldwater is what that death looks like. Same store sales were terrible, margins were weak and the company is blaming "a more challenging environment" for its problems. If this really were love, and not just investing, you're asking me if it's safe to buy CWTR after it's told us those three things would be akin to asking me if you should get back together with a guy or gal who just told you she "only liked you as a friend, has been actively seeing other people and thinks you should see a doctor... soon".

I mean; a relationship with Coldwater might work out from here but, as a friend, I feel obligated to steer you in another direction.

What direction? How about a break-up package of 1-800 Flowers (FLWS) (a Guy Adami favorite) and Blue Nile (NILE)? I wouldn't necessarily marry either of those but they make much better "Rebound" ideas than trying to catch a Coldwater bottom, from where I'm sitting.

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No positions in stocks mentioned.

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