However, when the storm abated, the retailer grappled with monumental challenges: a deluge of excess inventory and towering fixed costs. Attempts to shed this excess baggage only slashed their borrowing limit, plunging it from $35 million to a mere $10 million. Like a snowball turning into an avalanche, this excess inventory led customers to expect discounts, chipping away at the company’s profit margins.
Amidst a liquidity crunch, Soft Surroundings sought refuge in first- and second-lien loans, sparking restructuring conversations by June.
The Road Ahead: A Digital Resurrection?
As part of the Restructuring Support Agreement (RSA), Soft Surroundings is all set to initiate a sale process. Playing the lead role in this thrilling act is 1903 Partners, poised to purchase and subsequently transfer the company’s digital assets and intellectual property to Coldwater Creek. As the curtain falls on Soft Surroundings’ retail chapter, the final act will witness the company holding its grand finale sales, all timed perfectly for the festive shopping frenzy.
