Linens 'n Things Inc., the housewares retailer in bankruptcy protection, proposed rapidly closing 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 for permission to auction its remaining 371 stores on Tuesday 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 on Tuesday in Wilmington, Del. 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.