Linens 'N Things May Liquidate
Wednesday, October 8, 2008
Linens 'N Things, the bankrupt housewares retailer, yesterday proposed rapidly shutting its remaining stores and liquidating merchandise to beat a potential wave of retail failures before the U.S. holiday season.
The company asked bankruptcy Judge Christopher Sontchi in Wilmington for permission to auction its remaining 371 stores Oct. 14 and begin going-out-of business sales two days later. The quick shutdown would give Linens an edge over rival retailers that also will have to discount merchandise in the next few months, said Michael Gries, the company's chief restructuring officer.
"We knew there would be other liquidations that were also going to take place," Gries told Sontchi. Linens' store-closing sales would face "competition because it is going to be a buyers market."
Linens, based in Clifton, N.J., filed for court protection May 2, blaming a slowdown in consumer spending and an unsuccessful overhaul attempt in 2006. Apollo Management took Linens private in a $1.3 billion leveraged buyout.
Sontchi scheduled a hearing Friday to consider procedures to auction the remaining stores. Gries said Linens still might be saved through a last-minute sale, the company's preferred outcome. Two potential suitors said they were deciding whether to bid and shrink the chain, he said.
Linens, which had 589 stores, has cut the number to 371 since filing for bankruptcy. Gries said some of the remaining sites are unlikely ever to turn a profit.