Linens 'n Things files for bankruptcy protection
Linens Holding Co., the operator of Linens 'n Things home furnishings retail chain, said Friday it filed for Chapter 11 bankruptcy protection with plans to shut 120 underperforming stores, becoming the latest retailer to fall under the weight of declining housing markets and other economic worries.
The chain, which private equity firm Apollo Management LP bought for $1.3 billion in February 2006, will continue to operate without interruption. It also expects to be well stocked ahead of the back-to-school and holiday selling seasons as it secures $700 million in debtor in possession financing from General Electric Capital Corp.
Chief Executive Robert DiNicola will become executive chairman while restructuring expert Michael Gries was named chief restructuring officer and interim CEO.
The retailer, which had 2007 sales of about $2.8 billion with 589 stores across the U.S. and Canada, also expects the bankruptcy court to allow it to continue paying employee salaries and honor gift cards. It said its key vendors have been supporting the company with new merchandise in recent weeks.
The company also said the filing doesn't apply to its Canadian operation, where stores are among the strongest performers in its chain.
"The significant deterioration in the mortgage, housing and credit markets and the resulting impact on the retail marketplace, particularly the home sector, has overwhelmed the operating and merchandising improvements that we have made over the past two years," DiNicola said.
Click on the link for the full story. As flagged previously expect more bankrupticies to come in the year ahead and into 2009.