SANDPOINT, Idaho, March 4 /PRNewswire-FirstCall/ -- Coldwater Creek
Inc. (Nasdaq: CWTR) today reported financial results for the three month
period and fiscal year ended January 31, 2009.

    Fourth Quarter 2008 Operating Results

    --  Net sales were $283.2 million, compared with $345.5 million in the
        fiscal 2007 fourth quarter. Sales from the retail segment, which
        includes the Company's premium retail stores, outlet stores, and
        day spa locations, were $199.7 million versus $226.3 million in the
        fiscal 2007 fourth quarter. Comparable store sales declined 21.4 percent
        in the fourth quarter versus the fourth quarter of fiscal 2007.  Direct
        sales (phone and internet) were $83.5 million, compared with $119.3
        million in the same period last year.
    --  Gross profit for the fiscal 2008 fourth quarter was $76.0 million, or
        26.8 percent of net sales, compared with $103.7 million, or 30.0 percent
        of net sales, for the fiscal 2007 fourth quarter. The decrease in gross
        profit rate was primarily a result of deleveraging of occupancy costs
        due to lower sales.
    --  Selling, general and administrative expenses for the fiscal 2008 fourth
        quarter were $110.3 million, or 38.9 percent of net sales, compared with
        $133.8 million, or 38.7 percent of net sales, for the fiscal 2007 fourth
        quarter. The decrease in selling, general and administrative expenses of
        approximately $23.5 million was driven by reduced marketing spend, and
        other cost savings initiatives.
    --  Net loss for the three-month period was $18.6 million, or $0.20 per
        share, compared with a net loss of $17.0 million, or $0.19 per share,
        for the three-month period ended February 2, 2008.
    --  Premium retail store inventory per square foot, including retail
        inventory in the distribution center, decreased approximately 11.6
        percent compared with the fourth quarter of 2007. Total inventory
        decreased to $135.4 million, compared with $140.0 million at the end of
        the fourth quarter of 2007, including the addition of 42 new stores.
        The Company's cash position increased $18.7 million to $81.2
        million at the end of the fourth quarter compared to $62.5 million at
        the end of fiscal 2007.
    Full Year Ended January 31, 2009 Operating Results

    --  Net sales were $1,024.2 million versus $1,151.5 million in the twelve
        months ended February 2, 2008.  Sales from the retail segment were
        $751.4 million versus $775.1 million last year.  Direct sales were
        $272.9 million, compared with $376.4 million last year.
    --  Gross profit for fiscal 2008 was $350.6 million, or 34.2 percent of net
        sales, compared with $450.2 million, or 39.1 percent of net sales, in
        the same period last year.
    --  Selling, general and administrative expenses for 2008 were $395.3
        million, or 38.6 percent of net sales, compared with $460.2 million, or
        40.0 percent of net sales, in 2007.
    --  Net loss for fiscal 2008 was $26.0 million, or $0.29 per share, compared
        with a net loss of $2.5 million, or $0.03 per share, last year.  Fiscal
        2008 results include a non-cash charge of $0.9 million after-tax, or
        $0.01 per share, related to the impairment of certain Coldwater Creek
        day spa locations.
    Daniel Griesemer, president and chief executive officer of Coldwater
Creek, said, "We are clearly not satisfied with our fourth quarter and full
year sales and earnings results. While we successfully managed the
controllable aspects of our business, including our expenses, inventory,
and balance sheet, it was not enough to offset the overall macroeconomic
environment, challenging traffic, and promotional nature of the holiday
season. We ended the year with over $81 million in cash, up from $62
million in the prior year, and no borrowings under our credit facility.
During 2008 we also reduced SG&A expenses by over $60 million on a
year-over-year basis and premium retail inventory per square foot by
approximately 12%.

    "As we look into 2009, we believe that one of the keys to our success
will be to offer a merchandise assortment with the appropriate balance in
terms of fashion, fit, and value that will be relevant to the entire range
of our target demographic. At the same time, we will remain focused on
managing the business conservatively given the macroeconomic environment.
We are confident that we are taking all the right steps to position
Coldwater Creek to navigate the current economic downturn and emerge a
stronger and more efficient organization."

    Store Openings

    The Company opened seven new premium retail stores during the
three-month period ended January 31, 2009, bringing its store count at the
end of the year to 348 stores. The Company plans to open no more than 10
new stores in fiscal 2009.

    Liquidity

    At the end of fiscal 2008, the company had $81.2 million in cash, $93.0
million in working capital and no borrowings under its recently announced
credit facility. This compares to $62.5 million in cash and $115.8 million
in working capital at the end of fiscal 2007.

    Conference Call Information

    Coldwater Creek will host a conference call on Wednesday, March 4, 2009
at 4:45 p.m. (Eastern) to discuss fiscal 2008 fourth quarter results. To
listen to the live Web cast, log on to
http://www.videonewswire.com/event.asp?id=56321. Also, a link to the live
Web cast of the call is provided in the Investor Relations section of the
Company's Web site at http://www.coldwatercreek.com/. The call will be
archived from approximately one hour after the conference call until
Wednesday, March 18, 2009. The replay can be accessed by dialing (877)
660-6853 and giving account number 3055 and pass code 313653. A replay and
transcript of the call will also be available in the investor relations
section of the Company's Web site.

    Founded in 1984, and headquartered in Sandpoint, Idaho, Coldwater Creek
is a leading specialty retailer of women's apparel, gifts, jewelry, and
accessories. The company sells its merchandise through premium retail
stores across the country, online at coldwatercreek.com and through its
catalogs.

    CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:

    This news release contains "forward-looking statements" within the
meaning of the securities laws, including statements relating to our future
operating plans and financial results. These statements are based on
management's current expectations and are subject to a number of
uncertainties and risks, as well as assumptions that if they do not fully
materialize or prove incorrect, could cause our actual results to differ
materially from those expressed or implied by the forward-looking
statements. Important factors that could cause actual results to differ
materially from estimates or projections contained in the forward-looking
statements include, but are not limited to:

    --  the inherent difficulty in forecasting consumer buying and retail
        traffic patterns and trends, which continue to be erratic and are
        affected by factors beyond our control, such as the current
        macroeconomic conditions and the global credit crisis, continuing heavy
        promotional activity in the specialty retail marketplace, weather, and
        competitive conditions and the possibility that because of lower than
        expected customer response we may be required to sell merchandise at
        lower than expected margins, or at a loss;
    --  the possibility that, due to further declines in our sales, our
        financial condition may be negatively impacted and we may not be as able
        to maintain sufficient working capital in the future, and as a result
        our cash balances may decrease, requiring us to borrow under our credit
        facility;
    --  the possibility that should we need to access it in the future, our
        credit facility may not be available in full, or at all, for future
        borrowings due to borrowing base and other limitations therein;
    --  our potential inability to recover the substantial fixed costs of our
        retail expansion due to sluggish sales;
    --  our potential inability to continue to fund our retail expansion with
        operating cash as a result of either lower sales or higher than
        anticipated costs, or both;
    --  delays we may encounter in sourcing merchandise from our foreign and
        domestic vendors, risks related to our foreign sourcing strategy, and
        the possibility, that foreign sourcing may not lead to any reduction of
        our sourcing costs or improvement in our margins;
    --  the effect of volatile energy costs on various aspects of our business,
        including shipping, transportation, merchandise acquisition and consumer
        spending;
    --  increasing competition from discount retailers and companies that have
        introduced concepts or products similar to ours;
    --  unexpected costs or problems associated with our efforts to manage our
        expanding and increasingly complex business, including our current
        efforts to improve key management information systems and controls;
    --  difficulties encountered in anticipating and managing customer returns
        and the possibility that customer returns will be greater than expected;
    --  the risk that the benefits expected from our strategic initiatives will
        not be achieved or may take longer to achieve than we expect;
    --  risks associated with our dependence on a single distribution facility;
    and such other factors as are discussed in our most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S.
Securities and Exchange Commission ("SEC"). We believe that these
forward-looking statements are reasonable; however, you should not place
undue reliance on forward-looking statements, which are based on current
expectations and speak only as of the date of this release. We are not
obligated to publicly release any revisions to forward-looking statements
to reflect events after the date of this release. We provide a detailed
discussion of risk factors in periodic SEC filings, and you are encouraged
to review these filings in connection with this release.

    Contact:
      Lyn Walther, Divisional Vice President, Investor Relations
      Phone: 208-265-7005
      Web site:
      http://www.coldwatercreek.com

                             COLDWATER CREEK INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS AND SUPPLEMENTAL DATA
         (unaudited, in thousands except for per share data and store counts)

                              Three Months Ended         Fiscal Year Ended
                              ------------------         -----------------
    Statements of           January 31,  February 2,  January 31,  February 2,
     Operations:               2009         2008         2009         2008
                              --------     --------   ----------   ----------

    Net sales                 $283,229     $345,543   $1,024,221   $1,151,472
    Cost of sales              207,231      241,811      673,661      701,289
                               -------      -------      -------      -------
        Gross profit            75,998      103,732      350,560      450,183
    Selling, general and
     administrative
     expenses                  110,299      133,811      395,320      460,232
    Loss on asset
     impairments                     -           66        1,452          620
                                     -           --        -----          ---
        Loss from
         operations            (34,301)     (30,145)     (46,212)     (10,669)
    Interest, net, and
     other                          65          804        1,508        6,793
                                    --          ---        -----        -----
        Loss before income
         taxes                 (34,236)     (29,341)     (44,704)      (3,876)
    Income tax benefit         (15,683)     (12,322)     (18,741)      (1,388)
                               -------      -------      -------       ------
        Net loss              $(18,553)    $(17,019)    $(25,963)     $(2,488)
                              ========     ========     ========      =======

        Net loss per share
         -Basic                 $(0.20)      $(0.19)      $(0.29)      $(0.03)
                                ======       ======       ======       ======

        Weighted average
         shares
         outstanding -
         Basic                  91,213       90,954       91,037       92,801

        Net loss per share
         -Diluted               $(0.20)      $(0.19)      $(0.29)      $(0.03)
                                ======       ======       ======       ======

         Weighted average
          shares
          outstanding -
          Diluted               91,213       90,954       91,037       92,801

    Supplemental Data:
                              Three Months Ended         Fiscal Year Ended
                              ------------------         -----------------
                             January 31, February 2,  January 31,  February 2,
    Operating Statistics:      2009         2008         2009         2008
                              --------     --------   ----------   ----------

    Catalogs mailed             27,083       45,106       85,950      128,551
    Premium retail store
     count                                                   348          306
    Spa store count                                            9            9
    Outlet store count                                        35           30
    Premium retail store
     square footage                                        2,055        1,783

                              Three Months Ended         Fiscal Year Ended
                              ------------------         -----------------
                             January 31, February 2,  January 31,  February 2,
    Segment Net Sales:         2009         2008         2009         2008
                              --------     --------   ----------   ----------

    Retail                    $199,702     $226,257     $751,352     $775,082
    Direct                      83,527      119,286      272,869      376,390
      Total                   $283,229     $345,543   $1,024,221   $1,151,472
                              ========     ========   ==========   ==========

                             COLDWATER CREEK INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                       (unaudited, in thousands, except for share data)

                                ASSETS

                                            January 31,  February 2,
                                               2009         2008
                                             -------      -------
    CURRENT ASSETS:
        Cash and cash equivalents            $81,230      $62,479
        Receivables                           15,991       28,520
        Inventories                          135,376      139,993
        Prepaid and other                     11,086       17,246
        Income taxes recoverable              14,895       14,265
        Prepaid and deferred marketing
         costs                                 5,361       13,662
        Deferred income taxes                  9,792        8,073
                                               -----        -----

      Total current assets                   273,731      284,238

    Property and equipment, net              337,766      328,991
    Deferred income taxes                     14,147        7,680
    Restricted cash                            1,776        2,664
    Other                                      1,207          686
                                               -----          ---

      Total assets                          $628,627     $624,259
                                            ========     ========

                       LIABILITIES AND STOCKHOLDERS' EQUITY

    CURRENT LIABILITIES:
        Accounts payable                     $93,355      $75,936
        Accrued liabilities                   82,469       87,300
        Current deferred marketing fees and
         revenue sharing                       4,918        5,252
                                               -----        -----

      Total current liabilities              180,742      168,488

    Deferred rents                           137,216      122,819
    Capital leases and other financing
     obligations                              13,316       14,467
    Supplemental Employee Retirement
     Plan                                      7,807        8,041
    Deferred marketing fees and revenue
     sharing                                   5,823        7,064
    Other                                      1,227        1,517
                                               -----        -----

      Total liabilities                      346,131      322,396
                                             -------      -------

    Commitments and
     contingencies

    STOCKHOLDERS' EQUITY:
        Preferred stock, $.01 par value,
         1,000,000 shares authorized,
         none issued and outstanding               -            -
        Common stock, $.01 par value,
         300,000,000 shares
         authorized, 91,264,527 and
          90,796,551 shares
          issued, respectively                   913          908
        Additional paid-in capital           115,921      110,010
        Accumulated other comprehensive
         loss                                 (1,334)      (2,014)
        Retained earnings                    166,996      192,959
                                             -------      -------

      Total stockholders' equity             282,496      301,863
                                             -------      -------

      Total liabilities and
       stockholders' equity                 $628,627     $624,259
                                            ========     ========

                           COLDWATER CREEK INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (unaudited, in thousands)

                                   Fiscal Year Ended
                                   -----------------
                                 January 31, February 2,
                                    2009        2008
                                    ----        ----

    OPERATING ACTIVITIES:
    Net loss                     $(25,963)    $(2,488)
    Adjustments to reconcile net
     loss to net cash
     provided by operating
     activities:
        Depreciation and
         amortization              61,811      52,453
        Stock-based compensation
         expense                    4,779       5,241
        Supplemental Employee
         Retirement Plan
         expense                    1,293       3,475
        Deferred income taxes      (8,930)     (8,457)
        Excess tax benefit from
         exercises of stock
         options                      (82)     (2,264)
        Net loss on asset
         dispositions                 405       1,126
        Loss on asset
         impairments                1,452         620
        Other                         318          23
    Net change in current assets
     and liabilities:
        Receivables                12,529      (6,382)
        Inventories                 4,617     (13,040)
        Prepaid and other and
         income taxes
         recoverable                6,199     (17,355)
        Prepaid and deferred
         marketing costs            8,301      (4,411)
        Accounts payable           23,126     (11,506)
        Accrued liabilities        (7,472)     20,635
        Income taxes payable            -         932
    Change in deferred
     marketing fees and
     revenue sharing               (1,575)     (1,840)
    Change in deferred rents       16,353      34,932
    Other changes in non-
     current assets and
     liabilities                   (1,628)        665
                                   ------         ---
          Net cash provided by
           operating
           activities              95,533      52,359
                                   ------      ------

    INVESTING ACTIVITIES:
        Purchase of property
         and equipment            (81,215)   (121,263)
        Proceeds from asset
         dispositions               3,086       1,673
        Change in restricted
         cash                         888         888
                                      ---         ---
          Net cash used in
           investing
           activities             (77,241)   (118,702)
                                  -------    --------

    FINANCING ACTIVITIES:
        Net proceeds from
         exercises of stock
         options and ESPP
         purchases                  1,318       2,966
        Excess tax benefit from
         exercises of stock
         options                       82       2,264
        Payments on capital
         lease and other
         financing
         obligations                 (941)        (42)
        Purchase and retirement
         of treasury stock              -     (25,046)
                                        -     -------
          Net cash provided by
           (used in) financing
           activities                 459     (19,858)
                                      ---     -------

            Net increase (decrease)
             in cash and cash
             equivalents           18,751     (86,201)
                Cash and cash
                 equivalents,
                 beginning         62,479     148,680
                                   ------     -------

            Cash and cash
             equivalents,
             ending               $81,230     $62,479
                                  =======     =======