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Linens 'n Things seeks to speed up store closings

October 08, 2008|From Bloomberg News

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.

Sontchi scheduled a Friday hearing to consider auction procedures. 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.

Since filing for bankruptcy protection, Linens has cut the number of stores to 371 from 589, and Gries said some of the remaining sites were unlikely to ever turn a profit.

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