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Linens N Things files for bankruptcy protection, closes stores |
05.09.2008
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CLIFTON, N.J.--Feeling the pressures of a weak economy and an apparent housing market slump, Linens Holdings Co. filed for Chapter 11 bankruptcy protection May 2.
The home goods retailer, which operates 589 Linens N Things stores in 47 states and in Canada, was hit hard by the overall slowdown in the home category and had been suffering from weak profits throughout 2007. As part of its financial restructure, the retailer will close 120 underperforming stores in 31 states, almost a quarter of which are located in California, according to a company statement.
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"The decision to close stores was difficult but necessary to improve Linens N Things' financial position and place the company on a firmer financial footing as we move forward," said DiNicola in a statement.
The filing pertains only to its U.S. operations. The retailer's Canadian stores, which are among the strongest performers in the chain, are not included in the filing and there are no plans for a similar filing in Canada, according to a statement.
Linens N Things received interim court approval for $700 million in debtor-in-possession financing on May 5 that will allow the company to continue to operate during its financial restructure. Linens N Things' board of directors named Michael F. Gries, a noted financial restructuring expert, chief restructuring officer and interim CEO. Robert DiNicola becomes executive chairman.
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