Branching Out: Successful Spin-off Titles Expand Coldwater Creek’s Brand Territory

With a single phone, an extra-long phone cord and a closet of nature-inspired products, the husband-and-wife team of Dennis and Ann Pence founded the brand known as Coldwater Creek in 1984. Transplants from the East Coast, the Pences fell in love with the slower pace, friendly atmosphere and lush scenery of the Northwest on a trip and later made Sandpoint, Idaho, the location of their home and new business.

According to David Gunter, director of investor relations and corporate communications, the first catalog was an 18-page mailer featuring a hodge-podge of nature-themed merchandise, like bird feeders and binoculars.

To build the house file, Gunter explains, Coldwater Creek followed in the footsteps of other successful catalog businesses: The Pences ran tiny ads in the back of magazines such as Audubon, looking for environmentally-minded customers.

“Some items from the catalog ‘got legs,’ and others were less successful. Northcountry grew out of that,” says Gunter.

Today, the Northcountry title features mostly women’s apparel with a blend of gifts and hard lines, says Georgia Shonk-Simmons, president, retail and catalog.

Northcountry, in particular, is tailored to women who value comfort and natural fibers, and who love the culture of the Northwest.

Spotting Opportunity

To continue growing the customer base and the franchise, in the early nineties Coldwater Creek began to look for pockets of opportunity: customer markets that were under-served.

According to Shonk-Simmons, the key to creating successful spin-offs is a combination of looking both externally at trends as well as internally at your customers.

Looking at its database, Coldwater Creek saw an average customer that is female, age 35 to 55, with a household income around $60,000 to $70,000; she’s highly educated, pressed for time and is mostly likely to live along the Eastern seaboard, explains Shonk-Simmons.

These attributes made for a strong, catalog-loving customer base, but a little more digging unearthed other viable market segments.