NEW YORK — Coldwater Creek, a purveyor of clothing made from stretch denim and with figure-forgiving drawstring waistbands, is offering its Baby Boomer customers the relaxation they crave with a new day spa concept.
“In approximately two years, we’ll have several hundred of our core concept stores,” said David Gunter, a Coldwater Creek spokesman. “We wanted to be prepared with a second concept. We looked at several options, everything from brand and line extensions to potential acquisitions. We really kept coming back to this idea of a day spa concept.”
Coldwater Creek had sales of $788 million in 2005, up from $590 million in 2004. Coldwater will be a mature chain with 450 to 500 units by 2009 to 2010. The new concept, Coldwater Creek — The Spa, could ultimately support “a few hundred locations,” Gunter said.
The company began testing its first Coldwater Creek — The Spa at Bridgeport Village shopping center near Portland, Ore. — on April 5. There are plans for five more test sites, including Simi Valley Town Center in Simi Valley, Calif., bowing on May 3; Belmar in Lakewood, Colo., opening on May 17; Main Street Promenade in Naperville, Ill., opening in June; Southlake Town Square in Southlake, Tex., and Montgomery Village in Santa Rosa, Calif., both opening in July.
Each location will offer a menu of spa treatments including massage, facials, manicures and pedicures. Personal care products from Kerstin Florian and other third-party cosmetics firms will be sold. If the test is successful, the company will develop its own private label treatment products. Spa-approriate apparel such as sweatshirts, linen pants and robes will also be sold. The company launched a new Web site for The Spa.
The idea of spas took hold because the demographics of spa users are “strikingly similar to the Coldwater Creek customer,” Gunter said. He described the group as women in their early forties with a household income in excess of $75,000.
Gunter said the $11 billion spa industry is very fragmented; most day spas opening in the U.S. are single-unit ventures. Coldwater Creek sees that as an opportunity.
“The margin potential in the spa setting is very attractive,” Gunter said. “It’s all based upon room utilization. The reason we’re embarking on the test and what we’ll be looking at closely is our ability to drive traffic from the core concept and into the spas. If you keep those rooms full, the margin picture is quite positive.”
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All The Spa locations are a short walk from a Coldwater Creek store, Gunter said. Units feature soft shades of wood, slate and water elements such as fountains. The company is developing a standardized training protocol so that a consumer’s experience will be identical from one location to another.
“By spring 2007, we’ll know whether the test was successful or not,” Gunter said. “We’re taking that time to refine the model.”