Concerned over the company’s stagnant growth over the past several years, women’s apparel cataloger/retailer Coldwater Creek founder Dennis Pence retook the CEO position in late September. He replaces Georgia Shonk-Simmons, who retains her role as president, board member, while adding additional duties as chief merchandise officer.
Shonk-Simmons, a former Newport News executive vice president who joined Coldwater Creek as vice president/director of merchandising in 1998, was promoted to president of the Sandpoint, ID-based company in April 1999, then added the CEO title in January 2001.
“This marks a return to a structure that worked very well in Coldwater Creek’s corporate history,” said Pence in a statement. “My personal charge is returning the company to our days of rapid growth. As we grow the brand through catalogs, over the Internet, and, increasingly, with the expansion of our retail store base across the country, I’ll leverage my sales and marketing experience and place additional emphasis on improving our return on invested capital and operating earnings.” (No company officials would comment on the restructuring.)
It’s unusual to see this type of management restructuring happen, “but it’s also brave to ignore what your critics might say and do what’s right for the company,” observes Kevin Silverman, a retail analyst at Chicago-based investment management firm ABN AMRO.
“Dennis is an ROI-based guy, not a merchant,” Silverman says. “So when you’re going through losses, I’m not sure that someone whose skills are merchandising can find ways to cut costs, and tweak spending and budgets. This is a capital-rich company that has a lot of flexibility, and Dennis is going to make some choices that Georgia may have made differently because they have different skill sets.”
During Shonk-Simmons’s 20-plus months as CEO, the company’s stock price nearly halved from $28.44 on Jan. 2, 2001 to $14.70 on Sept. 26, 2002. Catalog sales for the company’s fiscal year 2001 ended March 2, 2002 dropped to $400.8 million compared to $424.3 million in fiscal 2000. Catalog circulation was reduced 12.3% during the year, however.