Linens 'n Things files for bankruptcy
05-03-08 | 12:07 AM
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Linens 'n Things files for bankruptcy
From yahoo.com:
http://news.yahoo.com/s/ap/20080502/...ngs_bankruptcy
Another company hit by the sad economic situation.
Linens 'n Things files for bankruptcy protection
By MAE ANDERSON, AP Business Writer
Fri May 2, 7:02 PM ET
NEW YORK - A Chapter 11 bankruptcy filing by Linens 'n Things is the latest sign that the retail sector is becoming leaner and meaner amid a difficult consumer environment.
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On Friday, the bedding- and home-furnishing retailer filed a petition in bankruptcy court in Delaware and said it would close 120 underperforming stores, almost a quarter of them in California.
Ken Perkins, president of research company RetailMetrics LLC, said the bankruptcy stems from a combination of operating issues and the lagging economy.
"There's clearly a shakeout going on in the retail industry which will continue through the rest of the year," he said. "I think the weaker players are going to be in difficult shape here."
The Clifton, N.J.-based company said economic factors such as the decline in the housing market, tightening credit markets and a downturn in consumer discretionary spending, particularly in the housewares and home furnishings sector, led to a "precipitous decline" in profitability and liquidity.
The factors worsened in the first quarter of 2008, the company said.
Linens 'n Things named Michael Gries of the restructuring firm Conway Del Genio Gries & Co. as chief restructuring officer and interim chief executive. Current CEO Robert DiNicola will become executive chairman. The company's Canadian stores — which Linens 'n Things said are among the best performing stores — are not included in the filing.
The filing is expected to be a boon to rival home-furnishings retailer Bed, Bath & Beyond Inc.
"The number of stores Linens 'n Things is closing is equivalent to almost 15 percent of Bed Bath & Beyond's core store base, so there is significant opportunity to gain market share," said William Blair & Co. analyst John C. Murphy.
In a note to investors on Friday, Deutsche Bank analyst Mike Baker said 50 percent of Bed, Bath & Beyond stores overlap with a Linens 'n Things store within three miles. He estimated the bankruptcy could conceivably add as much as 18 cents per share to Bed, Bath's annual earnings.
But the news is not as good for Linens 'n Things' parent, New York private investment firm Apollo Management. Apollo took the company private in 2006 for $1.3 billion.
"The rapid spread of the retail recession caught Apollo and other Wall Street firms by surprise," said Burt P. Flickinger III, managing director of the consumer industry consulting firm Strategic Resource Group.
With competition from Bed, Bath & Beyond, department stores and other specialty stores, "Linens 'n Things too often had older locations and smaller stores that didn't have the depth and range of products," he said.
Bankruptcy will eventually make the company a better competitor in the space, Flickinger said. Filing for Chapter 11 under the bankruptcy code frees a company from the threat of creditor lawsuits while it reorganizes its finances.
"Apollo knows how to restructure a bankrupt business," Flickinger said. "The business will be smaller but it will be more stable."
That downsizing will create more vacancies at malls — but it could also provide some mall operators the opportunity to adjust to the current economy, real estate experts said.
"Although the magnitude of this bankruptcy filing cannot be disputed, recent bankruptcy filings and store closings create new opportunities for other retailers to acquire space in the nation's shopping malls," said Dan Ansell, a partner at Greenberg Traurig LLP and chairman of its real estate operations division. "It also creates opportunities for shopping centers to redefine their tenant mix and thus adapt to current economic trends."
Consumers are likely to lose out as well. Brian Riley, senior analyst at research firm The TowerGroup, estimates the filing will freeze about $42 million in consumer gift cards, affecting about 400,000 customers. While consumers may think of the gift cards as cash, the bankruptcy court considers gift cards as debt, and therefore holders are not necessarily going to get paid.
Linens 'n Things, which operates about 589 retail stores in 47 states, joins specialty retailers Sharper Image Corp. and Lillian Vernon Corp. in seeking bankruptcy protection.
And Flickinger said this may just be the beginning.
"There is going to be a record number of store closings through bankruptcy in the next 150 to 1500 days, as the retail recession becomes the worst the U.S. has seen in 30 years," he said.
By MAE ANDERSON, AP Business Writer
Fri May 2, 7:02 PM ET
NEW YORK - A Chapter 11 bankruptcy filing by Linens 'n Things is the latest sign that the retail sector is becoming leaner and meaner amid a difficult consumer environment.
ADVERTISEMENT
On Friday, the bedding- and home-furnishing retailer filed a petition in bankruptcy court in Delaware and said it would close 120 underperforming stores, almost a quarter of them in California.
Ken Perkins, president of research company RetailMetrics LLC, said the bankruptcy stems from a combination of operating issues and the lagging economy.
"There's clearly a shakeout going on in the retail industry which will continue through the rest of the year," he said. "I think the weaker players are going to be in difficult shape here."
The Clifton, N.J.-based company said economic factors such as the decline in the housing market, tightening credit markets and a downturn in consumer discretionary spending, particularly in the housewares and home furnishings sector, led to a "precipitous decline" in profitability and liquidity.
The factors worsened in the first quarter of 2008, the company said.
Linens 'n Things named Michael Gries of the restructuring firm Conway Del Genio Gries & Co. as chief restructuring officer and interim chief executive. Current CEO Robert DiNicola will become executive chairman. The company's Canadian stores — which Linens 'n Things said are among the best performing stores — are not included in the filing.
The filing is expected to be a boon to rival home-furnishings retailer Bed, Bath & Beyond Inc.
"The number of stores Linens 'n Things is closing is equivalent to almost 15 percent of Bed Bath & Beyond's core store base, so there is significant opportunity to gain market share," said William Blair & Co. analyst John C. Murphy.
In a note to investors on Friday, Deutsche Bank analyst Mike Baker said 50 percent of Bed, Bath & Beyond stores overlap with a Linens 'n Things store within three miles. He estimated the bankruptcy could conceivably add as much as 18 cents per share to Bed, Bath's annual earnings.
But the news is not as good for Linens 'n Things' parent, New York private investment firm Apollo Management. Apollo took the company private in 2006 for $1.3 billion.
"The rapid spread of the retail recession caught Apollo and other Wall Street firms by surprise," said Burt P. Flickinger III, managing director of the consumer industry consulting firm Strategic Resource Group.
With competition from Bed, Bath & Beyond, department stores and other specialty stores, "Linens 'n Things too often had older locations and smaller stores that didn't have the depth and range of products," he said.
Bankruptcy will eventually make the company a better competitor in the space, Flickinger said. Filing for Chapter 11 under the bankruptcy code frees a company from the threat of creditor lawsuits while it reorganizes its finances.
"Apollo knows how to restructure a bankrupt business," Flickinger said. "The business will be smaller but it will be more stable."
That downsizing will create more vacancies at malls — but it could also provide some mall operators the opportunity to adjust to the current economy, real estate experts said.
"Although the magnitude of this bankruptcy filing cannot be disputed, recent bankruptcy filings and store closings create new opportunities for other retailers to acquire space in the nation's shopping malls," said Dan Ansell, a partner at Greenberg Traurig LLP and chairman of its real estate operations division. "It also creates opportunities for shopping centers to redefine their tenant mix and thus adapt to current economic trends."
Consumers are likely to lose out as well. Brian Riley, senior analyst at research firm The TowerGroup, estimates the filing will freeze about $42 million in consumer gift cards, affecting about 400,000 customers. While consumers may think of the gift cards as cash, the bankruptcy court considers gift cards as debt, and therefore holders are not necessarily going to get paid.
Linens 'n Things, which operates about 589 retail stores in 47 states, joins specialty retailers Sharper Image Corp. and Lillian Vernon Corp. in seeking bankruptcy protection.
And Flickinger said this may just be the beginning.
"There is going to be a record number of store closings through bankruptcy in the next 150 to 1500 days, as the retail recession becomes the worst the U.S. has seen in 30 years," he said.
Another company hit by the sad economic situation.
05-03-08 | 05:36 PM
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There is going to be a record number of store closings through bankruptcy in the next 150 to 1500 days, as the retail recession becomes the worst the U.S. has seen in 30 years
05-03-08 | 10:14 PM
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But according to the US government, we're NOT in a recession.
Weird that Bed Bath and Beyond seems to be doing ok, in the MA stores, they are virtually impossible to tell apart once you are in a store, could be Linens and Things could be BB and B.
Weird that Bed Bath and Beyond seems to be doing ok, in the MA stores, they are virtually impossible to tell apart once you are in a store, could be Linens and Things could be BB and B.
05-03-08 | 11:26 PM
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From: Peoria, IL
Originally Posted by Lastdaysofrain
But according to the US government, we're NOT in a recession.
Weird that Bed Bath and Beyond seems to be doing ok, in the MA stores, they are virtually impossible to tell apart once you are in a store, could be Linens and Things could be BB and B.
Weird that Bed Bath and Beyond seems to be doing ok, in the MA stores, they are virtually impossible to tell apart once you are in a store, could be Linens and Things could be BB and B.
05-06-08 | 12:31 AM
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Bed Bath & Beyond actually markets itself and advertises though. Can't say I even knew of Linens n Things was until I found out a friend's mom worked there.
10-08-08 | 02:26 PM
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LINENS 'N THINGS TO LIQUIDATE
It's curtains.Posted: 4:34 am
October 8, 2008
Linens 'n Things, conceding defeat in a multiyear turnaround effort, asked a Delaware judge for permission to quickly liquidate its stores.
Confirming exclusive reports by The Post - including a Sept. 17 story that said Linens 'n Things may take liquidation bids as soon as mid-October - the struggling housewares chain proposed to auction its stores on Oct. 14 and begin going-out-of-business sales two days later.
The Clifton, NJ retailer, taken private for $1.3 billion in 2006 by billionaire Leon Black's Apollo Management, had told employees in recent weeks that it still might find a buyer to save it from liquidation. Immediately following The Post's Sept. 17 report, Chief Restructuring Officer Michael Gries in an internal memo complained of "rumors and misinformation in the media."
Yesterday, however, Gries admitted to Delaware Bankruptcy Judge Christopher Sontchi that Linens 'n Things won't survive the holidays. He said the retailer aims to start liquidating as soon as possible.
Linens 'n Things' hopes faded last month after Cerberus Capital Management abandoned a plan to downsize the chain.
Lord & Taylor owner NRDC and Toronto private-equity firm Hilco Consumer Capital are circling Linens 'n Things' profitable chain of 37 stores in Canada. Yesterday, Gries told the judge two suitors are still deciding whether to make bids for parts of the chain.
It's curtains.Posted: 4:34 am
October 8, 2008
Linens 'n Things, conceding defeat in a multiyear turnaround effort, asked a Delaware judge for permission to quickly liquidate its stores.
Confirming exclusive reports by The Post - including a Sept. 17 story that said Linens 'n Things may take liquidation bids as soon as mid-October - the struggling housewares chain proposed to auction its stores on Oct. 14 and begin going-out-of-business sales two days later.
The Clifton, NJ retailer, taken private for $1.3 billion in 2006 by billionaire Leon Black's Apollo Management, had told employees in recent weeks that it still might find a buyer to save it from liquidation. Immediately following The Post's Sept. 17 report, Chief Restructuring Officer Michael Gries in an internal memo complained of "rumors and misinformation in the media."
Yesterday, however, Gries admitted to Delaware Bankruptcy Judge Christopher Sontchi that Linens 'n Things won't survive the holidays. He said the retailer aims to start liquidating as soon as possible.
Linens 'n Things' hopes faded last month after Cerberus Capital Management abandoned a plan to downsize the chain.
Lord & Taylor owner NRDC and Toronto private-equity firm Hilco Consumer Capital are circling Linens 'n Things' profitable chain of 37 stores in Canada. Yesterday, Gries told the judge two suitors are still deciding whether to make bids for parts of the chain.
10-08-08 | 04:04 PM
#8
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I thought the liquidation process began over the summer.
My store closed in early August and had a Spirit Halloween Store already move in. The other one closeby has been 70% off for two weeks now. I think I've been in a Linens 'n Things twice in my whole life. Weren't they just another Bed, Bath & Beyond?
My store closed in early August and had a Spirit Halloween Store already move in. The other one closeby has been 70% off for two weeks now. I think I've been in a Linens 'n Things twice in my whole life. Weren't they just another Bed, Bath & Beyond?
10-08-08 | 05:13 PM
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10-21-08 | 09:14 PM
#11
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This place wasn't too bad. Some things were pretty overpriced, but when my wife and I moved into the apartment we're in now, we found some decent stuff marked down there.
10-22-08 | 02:00 AM
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