Coldwater Creek (CWTR)

Item 9A. CONTROLS AND PROCEDURES (restated)

(a) Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, the Company’s management conducted an evaluation (under the supervision and with the participation of its Chairman and Chief Executive Officer and its Executive Vice President and Chief Financial Officer) as of the end of the period covered by this report, of the effectiveness of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. In such evaluation, it was concluded that our disclosure controls and procedures were effective as of January 28, 2006. In connection with the restatement of the Company’s consolidated financial statements (see Note 2, Restatement of Prior Financial Information, under Item 8 Consolidated Financial Statements and Supplementary Data), under the direction of its Chairman and Chief Executive Officer and its Executive Vice President and Chief Financial Officer, the Company reevaluated its disclosure controls and procedures and controls over financial reporting, and identified a material weakness in its internal control over financial reporting related to the Company’s recognition of revenue under its co-branded credit card program, as discussed in Management’s Report on Internal Control Over Financial Reporting (Item 9A(b)). Based on this reevaluation, the Chairman and Chief Executive Officer and the Executive Vice President and Chief Financial Officer each concluded that the Company’s disclosure controls and procedures were not effective as of January 28, 2006.

(b) Management’s Report on Internal Control Over Financial Reporting (restated)

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control system is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of January 28, 2006. Management’s assessment was based on criteria set forth in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In the Company’s Annual Report in Form 10-K for the year ended January 28, 2006, filed on April 13, 2006, management concluded that the Company’s internal control over financial reporting was effective as of January 28, 2006. Subsequently, the Company determined to restate certain of its previously issued financial statements to correct the recognition of revenue under its co-branded credit card program. As a result of this restatement, management reassessed the Company’s internal control over financial reporting using the COSO criteria and identified a material weakness related to the recognition of revenue under its co-branded credit card program that existed as of January 28, 2006. Specifically, the Company determined that it lacked technical expertise to evaluate revenue arrangements containing multiple deliverables and effectively identify and analyze the terms of such arrangements to ensure that financial reporting complied with generally accepted accounting principles. As a result, the Company has restated the interim financial statements in its quarterly reports on Form 10-Q for the quarters ended July 30, 2005 and October 29, 2005 and the fiscal 2005 financial statements and fourth quarter financial information included in its Form 10-K for the year ended January 28, 2006 to correct an overstatement in credit card marketing revenue.

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A material weakness in internal control over financial reporting is a control deficiency (within the meaning of the Public Company Accounting Oversight Board’s (“PCAOB”) Auditing Standard No. 2), or combination of control deficiencies, that results in there being more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. PCAOB Auditing Standard No. 2 identifies a number of circumstances that, because of their likely significant negative effect on internal control over financial reporting, are to be regarded as at least significant deficiencies, as well as strong indicators of a material weakness, including the restatement of previously issued financial statements to reflect the correction of a misstatement. As a result of the aforementioned material weakness related to the Company’s accounting for revenue arrangements containing multiple deliverables, management has revised its previously reported assessment and has concluded that, as of January 28, 2006, the Company’s internal control over financial reporting was not effective based on the criteria set forth in the COSO framework.

The Company’s independent registered public accounting firm, KPMG LLP, has issued an audit report on management’s restated assessment of the Company’s internal control over financial reporting, included elsewhere in this report.

(c) Remediation of Material Weakness

To remediate the material weakness in the Company’s internal control over financial reporting noted in Management’s Report on Internal Control Over Financial Reporting, subsequent to January 28, 2006, the Company intends to implement additional review procedures, including improving the level of the Company’s accounting expertise by increasing both internal and external resources. The Company intends to begin implementing these measures during the second quarter of fiscal 2006 and to test these controls during fiscal 2006 to determine if the material weakness has been remediated. While the Company believes that these steps will remedy the identified material weakness, there is a risk that these steps will not be adequate to sufficiently reduce or eliminate the deficiencies to demonstrate that its internal control over financial reporting is effective as of the end of the 2006 fiscal year.

(d) Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.