(Reuters) - Women's apparel retailer Coldwater Creek Inc said its co-founder and Chief Executive Dennis Pence will retire, effective December 31.

The company named Jill Brown Dean, current president and chief merchant, as the new CEO.

Pence will continue as the chairman of the board until January 1, 2014, Coldwater Creek said.

The company reported a smaller-than-expected quarterly loss, helped by higher comparable premium retail store sales and improved margins.

Coldwater Creek has been posting losses for more than two years. It has been losing out to larger rivals such as Chico's FAS and Ann Taylor Stores Corp as it struggles with lackluster merchandise and waning traffic.

Coldwater Creek shares were up 3 percent at $5.00 after the bell. They closed at $4.87 on the Nasdaq on Wednesday.

(Reporting by Ranjita Ganesan in Bangalore; Editing by Supriya Kurane)