Linens 'n Things could sell itself

Sept 17 (Reuters) - Home furnishings retailer Linens 'n Things may take liquidation bids as soon as mid-October after missing a recent chance to sell itself, the New York Post said on Wednesday, citing unnamed sources.

Private equity firm Cerberus Capital Management [CBS.UL] had been weighing a deal for six weeks but last week decided not to go ahead with the buyout of the retailer, which has been marred by falling sales and steep losses, the Post said.

Linens 'n Things, which filed for Chapter 11 bankruptcy protection in May, may take liquidation bids as soon as mid-October and this could lead to chain-wide clearances in November and December, the newspaper said, citing sources.

. . . more

Linens 'n Things Reports Reorganization Plan

Linens 'n Things Inc. (Clifton, N.J.) has announced a plan to emerge from bankruptcy early next year. According to The New York Post, the retailer will reverse many of the strategies introduced after the company was bought for $1.3 billion in 2005 by Apollo Management LP (Purchase, N.Y.), primarily a return to an "everyday, low price" model and away from splashy clearance sales and product promotions.

The plan is being devised by turnaround advisory firm Conway, Del Genio, Gries & Co. LLC (New York). It also will focus on improving the quality of its merchandise and keeping shelves stocked in timely fashion, the Post said.

The retailer also said it will close another 28 stores, two weeks after the home-goods retailer said its improving outlook meant it would shutter fewer stores than planned as part of its bankruptcy reorganization. It said in court papers that it is closing the additional stores because landlords refused to give the company more time to consider whether to keep the locations.

Linens 'n Things, the second-largest home goods chain in the U.S., filed for Chapter 11 bankruptcy protection in May.

Source: VMSD.com

Retailer Boscov's files bankruptcy, may be sold

NEW YORK (Reuters) - Department store chain Boscov's Inc filed for Chapter 11 bankruptcy protection on Monday and put itself up for sale, becoming the latest retailer to succumb to a weak economy and tight credit.

The Reading, Pennsylvania-based company and seven affiliates filed for protection from creditors with the U.S. bankruptcy court in Delaware. It had $538 million of assets and $479 million of liabilities as of May 3, a court filing shows.

Founded in 1911, Boscov's describes itself as the largest family-owned, full-service U.S. department store chain, with 49 locations in Pennsylvania, Delaware, Maryland, New Jersey, New York and Virginia. It said it employs about 9,500 people and had sales of $1.25 billion in the year ended February 2.

Michael Hughes, a Boscov's executive vice president, said in a court filing the company plans to close 10 unprofitable stores and is exploring a possible sale to a third party.

He said Boscov's was hurt as the housing market collapse, skyrocketing energy and gas prices and higher food costs caused consumers to spend less on discretionary items. Hughes also said tighter credit market conditions have caused many vendors to tighten credit terms.

"The recent addition of these pressures and constraints to a broadline retailing industry that already operated on thin profit margins has forced the debtors into inadequate liquidity levels," he said.

Hughes said Boscov's has had productive talks with creditors and intends to emerge from bankruptcy as soon as the first quarter of 2009.

In a separate filing, Boscov's said it plans to arrange up to $250 million of financing to keep operating, with Bank of America NA as administrative agent. It said it also retained Lehman Brothers Inc to help it obtain new capital.

Boscov's joins more than a dozen retailers to go bankrupt in the last year, including Bombay Co, Goody's Family Clothing Inc, Linens 'n Things Inc, Mervyn's LLC, Sharper Image Corp, Shoe Pavilion Inc and Steve & Barry's LLC.

Source: Reuters

Linens 'n Things to Close 57 Underperforming Stores

CLIFTON, N.J.--(BUSINESS WIRE)--Linens Holding Co. (“LNT” or the “Company”), today announced that as part of its ongoing financial restructuring, the Company plans to close fewer than the previously disclosed 87 underperforming stores. The actual number of store closings is now 57 (See list below). LNT filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code on May 2, 2008 and announced the closing of 120 stores at that time.

“The reduced number of store closings is the result of improvements in the outlook for these stores throughout the remainder of 2008 into 2009. We are pleased that we are able to keep additional stores open for the benefit of our guests, associates, vendors and the communities we serve,” said Michael F. Gries, Chief Restructuring Officer and Interim CEO. “While a very difficult decision, the stores that are closing are necessary given the current retail and economic climate and the need to drive the cost savings and operational efficiencies that will allow us to position LNT for long-term growth.”

Linens ‘n Things, with 2007 sales of approximately $2.8 billion, is one of the leading, national large format retailers of home textiles, housewares and home accessories. As of December 29, 2007, Linens ‘n Things operated 589 stores in 47 states and seven provinces across the United States and Canada.

Store Closing List
SHOPPING CENTER CITY ST PATTON CREEK HOOVER AL BROADWAY PARC TUSCON AZ SURPRISE SURPRISE AZ PRESCOTT GATEWAY PRESCOTT AZ CHANDLER CROSSING CHANDLER AZ CROSSROADS TOWNE CENTER GILBERT AZ TEMPE MARKETPLACE TEMPE AZ CHICO POWER CTR CHICO CA NEW CENTER STOCKTON CA MISSION VIEJO FREEWAY CENTER MISSION VIEJO CA L'PLAZA DE NORTHRIDGE NORTHRIDGE CA GATEWAY COURTYARD CENTER FAIRFIELD CA METRO POINT RETAIL CENTER COSTA MESA CA JANSS MARKETPLACE THOUSAND OAKS CA CAMARILLO TOWN CENTER CAMARILLO CA GATEWAY PLAZA VALLEJO CA ARDEN FAIR SACRAMENTO CA MARKETPLACE @ PALMDALE PALMDALE CA CREEKSIDE SHOPPING CENTER VISTA CA EASTVALE GATEWAY MIRA LOMA CA NORWALK CT FAIRFIELD CT THE PLAZA AT DELRAY DELRAY BEACH FL TOWER SHOPS DAVIE FL SHOPPS AT LAKE ANDREW VIERA FL THE MALL AT WELLINGTON GREEN WELLINGTON FL OVIEDO CROSSING OVIEDO FL THE MARKETPLACE AT SEMINOLE SANFORD FL ORLANDO SQUARE ORLANDO FL PINEAPPLE COMMONS STUART FL REGENCY COMMONS JACKSONVILLE FL VOLUSIA PLAZA DAYTONA BEACH FL CAMP CREEK MARKETPLACE EAST POINT GA THE PEACH SHOPPING CENTER ATLANTA GA SNELLVILLE PAVILLION SNELLVILLE GA RIVER FOREST TOWN CENTER RIVER FOREST IL HAWTHORNE FASHION SQUARE VERNON HILLS IL AVON AVON IN YOUREE & 70TH STREET SHREVEPORT LA TAUNTON DEPOT TAUNTON MA THE CENTER AT HOBBS BROOK STURBRIDGE MA MIDDLESEX MALL BURLINGTON MA WATERS PLACE ANN ARBOR MI EAST GATE SQUARE MOUNT LAUREL NJ PLAZA SANTA FE SANTA FE NM SHOPS AT BOCA PARK LAS VEGAS NV GALLERIA AT SUNSET MALL HENDERSON NV BLUE DIAMOND CROSSING LAS VEGAS NV PORTCHESTER PORT CHESTER NY NASSAU MALL LEVITTOWN NY AVON COMMONS AVON OH GOVERNOR'S PLAZA CINCINNATI OH VALLEY FAIR PLAZA DEVON PA THE MARKETPLACE AT TOWNE CENTER MESQUITE TX PARK PLACE TUKWILA WA BEAR CREEK PLAZA REDMOND WA SOUTH HILL MALL PUYALLUP WA Source: Yahoo Business

Linens ’n Things Hires DJM Realty for Store Disposition

Linens Holding Co., the operator of Linens ’n Things, said Monday it hired DJM Realty to manage the disposition of 120 underperforming stores that the company had targeted for closure as part of its restructuring.

“We are pleased to announce our partnership with DJM Realty and look forward to a successful disposition of these stores. This is a great chance for retailers looking to expand their real estate," said Hugh Scullin, senior VP of real estate, store planning, construction and legal for Linens ’n Things. Linens ’n Things said it would close the stores when it filed for bankruptcy protection in May. The hiring is subject to bankruptcy court approval. DJM plans to hold an auction before July 1.

Source: Chain Store Age

Linens Gets $124 Million for Inventory in 120 Stores to Be Sold

CLIFTON, N.J.–Bankrupt Linens ’n Things auctioned off the inventory in the 120 stores it’s closing for $124 million to a joint venture between Tiger Capital and SB Capital, the winning bidders.

The retailer received 96.6 percent of the cost of the inventory, said Paul Traub, a principal at Asset Disposition Advisors, which managed the auction process.

“A lot of times when you see companies in trouble if you have to liquidate inventory at substantially below the cost of inventory, it’s a bad sign,” Traub told HFN. “We got very close to the cost of inventory, which is a good sign.

“It shows that the company is not really in a horribly distressed position because it got good value for their inventory. Hopefully this will encourage the company’s bank [GE Capital] to provide additional credit.”

The $124 million reflects $2.5 million more than Tiger and SB Capital’s original stalking horse bid, Traub said.

The disposition of Linens’ 120 leases is still under way, Traub said.

Source: Home Furnishings News

Sharper Image, Linens 'n Things face auctions

NEW YORK, May 27 (Reuters) - Facing the tightest credit markets in years, bankrupt companies are finding it easier to sell off assets to the highest bidder or liquidate, rather than spend years crafting a restructuring plan.

The incentives to liquidate or sell assets have grown in the last few years due to tougher bankruptcy laws and tight credit markets, restructuring experts say. It will be highlighted this week as two bankrupt retailers, Sharper Image Corp SHRPQ.PK and Linens 'n Things, face auctions for all or parts of their assets.

"Sales in Chapter 11 have become more commonplace than they were certainly 20 years ago," said Mark Shapiro, managing director and head of Lehman Brothers Holding Inc's (LEH.N: Quote, Profile, Research) restructuring finance group. "To do a reorganization you need enough capital to survive for a long time."

Sharper Image, which filed for bankruptcy protection in February, will hold an auction on Wednesday for its assets, including its trade name and intellectual property.

The gadget retailer concluded last month that the best route to exit bankruptcy would be to sell itself, despite already closing 96 of its 187 stores in the hope a leaner version of the retailer could have stayed afloat.

The company had hoped a new catalog would boost sales enough to propel it through reorganization, but when that failed to materialize and credit markets did not improve, it began looking for buyers, its attorney, Harvey Miller, told a Delaware bankruptcy judge earlier this month.

A joint venture between private investment firms Hilco and Gordon Brothers, which had already partnered to liquidate the 96 Sharper Image stores, offered a bid for the company of $51.25 million, plus other considerations. That bid was approved as the "stalking horse," meaning the joint venture will make the first bid for the company on Wednesday.

But the auction could be competitive as Sharper Image has also received a bid from a group called JWLSP Acquisition, which includes the retailer's former chairman Jerry Levin.

The retailer joins a slew of other companies that have ended up selling assets or announced plans to sell assets over the last few months, including online gift catalog site RedEnvelope Inc REDEQ.PK, Hawaiian air carrier Aloha Airlines and all-business class airline Eos Airlines.

"The idea is if you sell the businesses quickly, then you can do a liquidating plan and that doesn't take very long to do," said Barbra Parlin, a bankruptcy attorney at Holland & Knight in New York. "But if you try to operate the business and pare it down and reorganize it in the true sense, it might take longer."

A buyer has the opportunity to reorganize a business, but it gains the ability to reorganize outside of court where its actions are not under a microscope.

Other companies have tried to liquidate weaker portions of their businesses in an effort to raise cash.

Linens 'n Things is heading down a similar path as Sharper Image, by auctioning off liquidating rights to 120 of its "underperforming" stores on Thursday, but for now, the retailer still plans to emerge from bankruptcy protection as a going concern with its remaining 589 stores.

Companies such as retailers and airlines face particular challenges, bankruptcy experts say, because it is hard to forecast when consumers will begin shopping again, or whether oil prices will ever return to more airline-friendly levels.

"There's a lot more pressure today," said David Heiman, a bankruptcy lawyer at Jones Day in Cleveland.

"You may have creditors who don't want to wait forever and say you better try and sell this company, rather than wait three to four years for it to reorganize."

Due to changes in the bankruptcy law, companies also find they are now running against a clock when they file for bankruptcy protection, Parlin said. The 2005 reforms to the bankruptcy code gave companies new time limits, including essentially an 18 month window to come up with their reorganization plan, Parlin said.

"As a result of the way the law changed, people who go into bankruptcy are concerned they're not going to have enough time to really reorganize," Parlin added. "People are almost feeling like they have to sell."

Source: Reuters

LINENS MULLS CLOSING 50-100 ADDITIONAL STORES

May 27, 2008 -- Bankrupt retailer Linens 'n Things may close additional stores beyond the 20 percent of its chain that it has already pledged to shutter, sources told The Post.

The Clifton, NJ-based home-furnishings retailer said earlier this month it will close 120 laggard stores in its chain of 589 locations, which spans 47 states.

But the company and its creditors are considering closing an additional 50 to 100 stores in moves that could eliminate more than one-third of the chain, sources said.

Linens 'n Things - which filed for Chapter 11 earlier this month after being taken private in 2005 for $1.3 billion by billionaire Leon Black's Apollo Management - might become more profitable in the short term as it eliminates money-losing locations.

But it will face a tough battle against larger rivals. Bed Bath & Beyond, which this year plans to add 50 to 55 stores to a base of 971, will hold the upper hand when it comes to size-related efficiencies.

Still, some industry observers say Linens 'n Things may succeed with a well-focused strategy that chooses to exit some regions entirely.

One of its most difficult markets has been California, whose flagging economy has been hit particularly hard by soaring energy prices, said Britt Beemer, president of America's Research Group, a Charleston, SC, retail consultant.

"If they're really serious about coming out of bankruptcy as a stronger company, they should look at which parts of the country they should vacate altogether," Beemer says. "A bad retail location is like cancer - you only get one chance to kill it."

Indeed, Linens 'n Things has already decided to close about 25 locations in California - by far the largest number of closings planned for any one state, according to court documents.

During the weeks leading up to its May 2 bankruptcy filing, Linens 'n Things routinely opened California stores late and closed them early in a bid to curb their steep electricity bills, sources said.

While it pleads with all of its landlords for lower rents, the company must make final decisions on whether or not to reject leases by late November.

"My guess is there are landlords out there who will give them more time," said David Pollack, a lawyer at Ballard Spahr Andrews & Ingersoll who represents landlords in the bankruptcy. "Nobody in the retail business wants to have a store close in November."

Source: NY Post

Linens Gets Financing

New Jersey-based Linens Holding Co. — which operates the Linens ’n Things retail chain — has received Bankruptcy Court approval to use its $700 million debtor-in-possession financing, “pending a hearing on final approval later this month,” according to a statement from Chief Restructuring Officer and Interim Chief Executive Officer Michael Gries.

As part of its restructuring effort, the company plans to close 120 of its 589 stores.

The chain will close two Connecticut stores — one each in Farmington and Lisbon — according to its Chapter 11 filing.

Linens ’n Things operates stores in Enfield and Manchester, which will remain open.

The financing will allow the company “to quickly normalize vendor relationships, providing a healthy merchandise flow as the company prepares for the back-to-school and holiday selling seasons, and meet its ongoing obligations through the restructuring process,” Gries said.

It will enable the company to continue to pay wages, healthcare benefits, workers’ compensation, 401k contributions, and other employee benefits, he said.

It also allows Linens ’n Things to continue to honor gift cards, rewards certificates, coupons, and merchant rebates, as well as its refund and exchange policies, according to Gries.

Relief From Creditors

“The court also granted certain relief for the payment of existing creditors, including utilities, taxing authorities, various logistics and transportation providers, as well as payments for goods shipped by vendors prior to the bankruptcy filing, but not received by Linens Holding Co. until after the filing,” he said.

Linens ‘n Things filed to reorganize under Chapter 11 on May 2 in the United States Bankruptcy Court for the District of Delaware.

Chapter 11 status permits a financially troubled company to continue its daily business while formulating a plan to regain profitability, or failing that, to liquidate.

The bankruptcy court filing comes just weeks after the company announced that it had hired a New York-based consultant specializing in mergers and acquisitions, divestitures, and restructuring.

Missed Payment

Three weeks ago, Chairman and Chief Executive Officer Robert J. DiNicola announced that his company had retained New York-based Financo Inc. “as a special advisor to assist the company in evaluating various strategies.”

On April 15, the company missed a roughly $16.1 million quarterly interest payment to the holders of its senior secured notes due 2014.

The company also disclosed on the same day that it was in discussions with “an ad hoc committee of holders of the notes regarding a restructuring of the company’s capital structure.”

Reorganization Underway

“The lenders under the company’s senior asset-backed revolving credit facility are supportive of efforts toward a consensual restructuring,” DiNicola said.

The company also retained Conway, Del Genio, Gries & Co., LLC as its financial advisor, he said.

In early April, published reports in the Wall Street Journal and in the New York Post claimed that Linens ’n Things could file for Chapter 11 status at any time.

The chain will continue to operate its stores “without interruption during the reorganization and the stores are open for business and expect to be well stocked with merchandise,” DiNicola said.

Source: Hartford Courant

Report: Linens Closures Won’t Hurt REITs

NEW YORK CITY-Though Linens’ N Things’ bankruptcy filing will result in the closing of 120 stores, the largest U.S. REITS face only minimal exposure, says a research report by Bank of America Securities.

Kimco Realty has five stores to be closed, followed by Developers Diversified Realty and Regency Centers with four. CBL & Associates Properties, General Growth Properties and Simon Property Group have three units each. Canadian stores are not affected by the filing.

“The REITs will not be receiving lease termination fees for the LNT closings given the bankruptcy, and big box stores are more difficult to re-lease,” said the report, written by Christy McElroy. “That said, we are not concerned about the earnings impact, as the number of stores relative to the size of each of the companies should not impact results substantially.”

But don’t expect to see another large user taking the shuttered spaces, which average 33,000 sf. Few chains with units that size are expanding right now.

“These were the least productive stores for a reason,” said Jim Sullivan, a managing director of Green Street Advisors, the Newport Beach, CA-based real estate research firm and consultancy. “I wouldn’t be surprised to see them chopped up. The stores are in malls, strip centers, power centers, and all have very different dynamics.”

A group of smaller tenants will be much more likely, once the landlords involved get control of the space. That may be the chief advantage.

“They have some good landlords who know what they’re doing,” said Cory G. Zelnik, president and CEO of New York City-based real estate consultancy Zelnik & Company LLC. “The larger ones will find this opportunistic.”

Source: BBJ

Linens 'n Things to Close 120 Stores - Here's the list

HUNTERS RIDGE TOWN CENTER	FONTANA	CA
PACIFIC COMMONS	FREMONT	CA
AMERIGE HEIGHTS TOWN CENTER	FULLERTON	CA
PACHECO PLAZA	GILROY	CA
GLENDALE MARKETPLACE	GLENDALE	CA
OLYMPIC & SAWTELLE	LOS ANGELES	CA
SANTA MARGARITA TOWN CENTER	MARGARITA	CA
SISK ROAD CENTER	MODESTO	CA
MONTCLAIR PLAZA	MONTCLAIR	CA
THE MOORPARK MARKETPLACE	MOORPARK	CA
THE SHOPS ON SOUTH LAKE STREET	PASADENA	CA
PLEASANT HILL	PLEASANT HILL	CA
CANYON SPRINGS	RIVERSIDE	CA
THE PROMENADE OF NATOMAS	SACRAMENTO	CA
OAKRIDGE MALL	SAN JOSE	CA
STEVENS CREEK CENTRAL SHOPPING CTR.	SAN JOSE	CA
RIVERSIDE SHOPPING CENTER	SHERMAN OAKS	CA
TRACY	TRACY	CA
THE MARKET PLACE	TUSTIN	CA
DYER STREET TRIANGLE	UNION CITY	CA
FALLBROOK CENTER	WEST HILLS	CA
ARAPAHOE CROSSINGS	AURORA	CO
BROOMFIELD VILLAGE	BROOMFIELD	CO
QUEBEC SQUARE	DENVER	CO
BELMAR SHOPPING CENTER	LAKEWOOD	CO
FARMINGTON	FARMINGTON	CT
LISBON LANDING	LISBON	CT
MARKETPLACE AT ALTAMONTE	ALTAMONTE SPRINGS	FL
AVENTURA	AVENTURA	FL
BOCA RATON	BOCA RATON	FL
THE SHOPPES AT DADELAND	MIAMI	FL
LNT SHOPPING CENTER	VERO BEACH	FL
CROSS COUNTY PLAZA	W. PALM BEACH	FL
PERIMETER MALL	ATLANTA	GA
UPTOWN SQUARE SHOPPING CENTER	FAYETTEVILLE	GA
STONECREST MARKETPLACE	LITHONIA	GA
MACON MALL	MACON	GA
SOUTHLAKE PAVILLION	MORROW	GA
GRAND TETON MALL	IDAHO FALLS	ID
NORTH MICHIGAN AVE	CHICAGO	IL
DEER GROVE CENTER	PALATINE	IL
THE PROMENADE VENTURE II	SCHAUMBURG	IL
ORCHARD PLACE SHOPPING CENTER	SKOKIE	IL
UNIVERSITY CENTER	MISHAWAKA	IN
THE LEGENDS AT VILLAGE WEST	KANSAS CITY	KS
ORCHARD CORNERS	LENEXA	KS
INDEPENDENCE MALL	KINGSTON	MA
BERKSHIRE MALL	LANESBORO	MA
KING PHILLIPS CROSSING	SEEKONK	MA
THE CAPITAL CENTER	LARGO	MD
BANGOR PARKADE	BANGOR	ME
THE SHOPS AT BIDDEFORD CROSSING	BIDDEFORD	ME
RIVERTOWN MARKETPLACE	GRANDVILLE	MI
CENTERPOINT MALL	KENTWOOD	MI
MILLENIUM PARK	LIVONIA	MI
NOVI TOWN CENTER	NOVI	MI
BALDWIN COMMONS	ORION TOWNSHIP	MI
WINCHESTER MALL	ROCHESTER HILLS	MI
TROY MARKETPLACE	TROY	MI
THE GATEWAY	W. BLOOMFIELD TWP.	MI
ALPINE SUMMIT	WALKER	MI
APACHE SHOPPES	ROCHESTER	MN
WOODBURY LAKES	WOODBURY	MN
HARTMAN HERITAGE CENTER	INDEPENDENCE	MO
STATELINE STATION S/C	KANSAS CITY	MO
BARRY TOWNE CENTER	KANSAS CITY	MO
MENARD'S PLAZA	WEST FARGO	ND
SORENSON PARKWAY PLAZA	OMAHA	NE
HOWELL COMMONS	HOWELL	NJ
WRANGLEBORO SQUARE	MAY LANDING	NJ
WOODBRIDGE CROSSING	WOODBRIDGE	NJ
SOUTH VIRGINIA ST	RENO	NV
THE CROSSING	CLIFTON PARK	NY
NORTHWAY MALL	COLONIE	NY
WOODBURY TOWN CENTER	HARRIMAN	NY
MANHASSET CENTER	MANHASSET	NY
CORTLAND TOWN CENTER	MOHEGAN LAKE	NY
MIDWAY SHOPPING CENTER	SCARSDALE	NY
RIVERSIDE CENTER	UTICA	NY
BAINBRIDGE COMMONS	AURORA	OH
POLARIS TOWNE CENTER	COLUMBUS	OH
CUYAHOGA FALLS MARKETPLACE	CUYAHOGA	OH
TUTTLE CROSSING	DUBLIN	OH
GOLDEN GATE PLAZA	MAYFIELD HEIGHTS	OH
CROSSROADS OF AMERICA	PERRYSBURG	OH
TANASBOURNE TOWN CENTER	BEAVERTON	OR
MILLCREEK PAVILLION	ERIE	PA
FORMER HECHINGERS	MONROEVILLE	PA
MARPLE CROSSROADS	SPRINGFIELD	PA
PITTSBURGH MILLS	TARENTUM	PA
LEHIGH VALLEY MALL	WHITEHALL	PA
MIDDLETOWN CENTER	MIDDLETOWN	RI
DORMAN CENTER	SPARTANBURG	SC
HICKORY HOLLOW MALL	ANTIOCH	TN
TECH RIDGE CROSSING	AUSTIN	TX
SUNRISE MALL	BROWNSVILLE	TX
PLAZA AT CEDAR HILL	CEDAR HILL	TX
BEST BUY PLAZA	DALLAS	TX
ALPHA PARKWAY	DALLAS	TX
WEST OAKS MALL	HOUSTON	TX
RIO NORTE CENTER	LAREDO	TX
THE MARKETPLACE AT TOWNE CENTER	MESQUITE	TX
PLANO	PLANO	TX
WICHITA FALLS	WICHITA FALLS	TX
MURRAY	MURRAY	UT
NEWPARK TOWN CENTER	PARK CITY	UT
POTOMAC MILLS SHOPPING CENTER	PRINCE WILLIAM	VA
TYSON'S CORNER	VIENNA	VA
GREENWAY STATION	MIDDLETON	WI
THE GRAND AVENUE MALL	MILWAUKEE	WI
REGENCY MALL	RACINE	WI

Linens 'n Things to close 3 DC area stores

Housewares retailer Linens n' Things Inc. has filed for Chapter 11 bankruptcy protection and plans to close 120 stores, including three in the Washington area.

The Clifton, N. J.-based retailer, taken private two years ago by Apollo Management LP, lists $1.42 billion in debt and $1.74 billion in assets. The filing does not include Linens n' Things Canadian stores.

Linens n' Things filed for bankruptcy reorganization because of the impact of the current economic downturn on the company's operating performance.

Linens n' Things will continue to operate and to pay its employees during reorganization. The company has also lined up $700 million in debtor in possession financing from General Electric Capital.

Local Linens n' Things closings include its stores at Capital Center in Largo, Potomac Mills in Prince William County and Tysons Corner in Vienna.

The company currently operates 589 stores.

Linens 'n Things Files Voluntary Petition Under Chapter 11 to Complete Financial Restructuring

Home Furnishing Chain Remains Open For Business without Interruption; Company Secures $700 million in DIP Financing from General Electric Capital Corp.

Restructuring Plan Includes Closure of 120 Underperforming Stores

Company Chairman & CEO Robert DiNicola to become Executive Chairman; Financial Restructuring Expert, Michael Gries, Named Chief Restructuring Officer and Interim CEO


CLIFTON, N.J.--(BUSINESS WIRE)--Linens Holding Co. (“LNT” or the “Company”), a leading home furnishings specialty retailer operating as “Linens ‘n Things,” announced today that the Company and its U.S. subsidiaries have filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The national home furnishings chain will continue to operate its stores without interruption during the reorganization and the stores are open for business and expect to be well stocked with merchandise. The filing pertains only to LNT’s operations in the United States. The Company’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.

The decision to file for Chapter 11 protection was driven largely by the impact of the current economic downturn on the Company’s operating performance. Filing for Chapter 11 provides the Company with the tools to restructure its balance sheet, close under-performing store locations, revisit certain agreements and position the Company for long-term success. LNT has requested immediate authorization and expects approval from the Court to continue paying employee salaries and benefits as well as to honor gift cards and store credits as normal.

LNT has secured $700 million in debtor-in-possession (DIP) financing from General Electric Capital Corp., which will ensure healthy merchandise flow as the Company prepares for the back-to-school and holiday selling seasons. The Company has been working closely with key vendors, who have been supporting the Company with new merchandise in recent weeks. The DIP facility will allow the Company to normalize relations with the larger vendor community. The Company believes the DIP facility will provide adequate working capital to meet its ongoing obligations during the restructuring.

“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,” said Robert J. DiNicola, Executive Chairman. “We are making the strategic decision to use a Chapter 11 filing to proactively address our capital structure and ensure that our stores will remain well stocked while we work through the steps to align the capital structure of the Company with the realities of today’s business environment. At the store level, we remain fully operational and ready to serve our guests.”

The Company also announced that as part of its financial restructuring it plans to close 120 underperforming stores. (See attached list).

“The decision to close stores was difficult but necessary to improve LNT’s financial position and place the Company on a firmer financial footing as we move forward,” stated Mr. DiNicola. “We will be able to realize important cost savings and operational efficiencies as a result of this process, allowing us to serve all our constituencies more effectively.”

In order to help effectuate the Company’s financial restructuring, LNT’s Board of Directors has named Michael F. Gries, a noted financial restructuring expert and Co-Founder of Conway Del Genio Gries & Co., Chief Restructuring Officer and Interim CEO. Mr. DiNicola, the Company’s current Chairman and CEO, will become Executive Chairman. David Coder, currently Executive Vice President, Store Operations, has been appointed President and Chief Operating Officer of LNT.

“As we move forward with LNT’s restructuring, the Board and I concluded that we needed to have additional restructuring expertise on our executive team,” added Mr. DiNicola. “Michael Gries is as good as it gets in this area, a nationally recognized leader with the deep experience in driving the financial initiatives necessary to position our Company for the future. I look forward to working with him to help LNT reach its full potential. I am also particularly pleased about Dave Coder’s promotion. He has been a key part of our past success and the operational strides we have made and will be integral in our reorganization efforts.”

Linens ‘n Things, with 2007 sales of approximately $2.8 billion, is one of the leading, national large format retailers of home textiles, housewares and home accessories. As of December 29, 2007, Linens ‘n Things operated 589 stores in 47 states and seven provinces across the United States and Canada. More information about Linens ‘n Things can be found online at http://www.lnt.com/.

Source: Yahoo

LNT in Talks with Lenders - Defers Interest Payment

NEW YORK — Linens ‘n Things said Tuesday it is in talks with creditors on a capital restructuring that could bail out the ailing retailer and help it avoid bankruptcy.

The seller of textiles, housewares and other home goods also said it has delayed a $16.1-million (U.S.) interest payment while talks continue, and its lenders have agreed to delay exercising their right to stop making loans to the company.

Linens ‘n Things, bought by affiliates of billionaire investor Leon Black's firm Apollo Global Management in 2006 for $1.3-billion, said it is in talks with a committee of its debt holders about altering its capital structure.

The Wall Street Journal reported last week that Linens ‘n Things could file for Chapter 11 bankruptcy protection as early as Tuesday. A source told Reuters on Friday that bankruptcy was one option being considered, but not the only option.

A bankruptcy by Linens ‘n Things would be among the biggest failures by a business acquired during the recent private equity boom and a stark example of how the subprime mortgage debacle and resulting credit crunch have spread to other parts of the economy.

Linens ‘n Things Chief Executive Robert DiNicola blamed the company's financial woes on the triple punch of the credit crunch, the housing downturn and the slowdown in consumer spending.

“The increasing deterioration of the credit markets and the residential real estate meltdown ... and the resulting downturn in consumer spending, especially in the home sector, have combined to create additional and acute financial challenges for the company and the retail sector as a whole,” Mr. DiNicola said.

Linens ‘n Things posted a net loss of $242.1-million in 2007 on net sales of $2.79-billion. Comparable-store sales fell 3.4 per cent for the year, while its ratio of earnings to fixed charges was 0.4.

Mr. DiNicola said the company's operating results, along with “the rapidly increasing financial storm outside the company,” have caused its vendors to impose on it significantly more restrictive payment terms, which in turn has “had a dramatic effect on our liquidity outlook for the remainder of the year.”

The housing downturn and slowdown in consumer spending have hurt all providers of home goods, including Bed Bath & Beyond Inc., Pier 1 Imports Inc. and Williams-Sonoma Inc.

But like rivals Tuesday Morning Corp. and Kirkland's Inc., Linens ‘n Things has had an especially hard time competing at the low end with discounters like Wal-Mart Stores Inc. and Target Corp. and at the high end with chains like Pottery Barn and Crate and Barrel.

As Linens ‘n Things explores options to strengthen its balance sheet and improve its access to funding, it will defer a $16.1-million quarterly interest payment due on April 15 to some of its debt holders. The company has a 30-day grace period before the nonpayment becomes a default.

Linens ‘n Things said it has until May 13 before its creditors, which include units of General Electric Co, can exercise their rights to withhold loans and other credit extensions.

A spokesman for private equity firm Apollo, which is planning an initial public offering, declined to comment.

Linens ‘n Things, which had 589 North American stores at the end of 2007, said it was working with turnaround firm Conway Del Genio Gries & Co. It said the committee of debt holders is being advised financially by Houlihan Lokey Howard & Zukin Capital Inc. and legally by Kasowitz, Benson, Torres & Friedman LLP.

Source: ReportOnBusiness.com

Linens 'n Things expected to file bankruptcy

Struggling Clifton-based housewares retailer Linens 'n Things is expected to file for bankruptcy within days, according to industry analysts and observers.

Industry insiders expect Linens to negotiate deals with creditors before declaring bankruptcy.

Concerns about the company's cash flow and strained relationships with vendors caused Fitch Ratings, an international credit rating agency, to lower three of Linens' credit ratings Wednesday afternoon.

"Given that their credit profile is deteriorating, we're also worried about the vendor relationships and their liquidity position," said Tiffany Co, director of Fitch Ratings.

Linens was saddled with $650 million in long-term debt as a result of a $1.3 billion leveraged buyout in late 2006 by a consortium headed by private-equity firm Apollo Management LP, a major investor in retailers. Linens has been struggling over the past year as sales slumped because of the housing slowdown and the daunting task of competing with stronger rival Bed Bath & Beyond Inc.

Warren Shoulberg, editor of Home Furnishings News, said the expectation among industry experts at this week's home-furnishings trade show in High Point, N.C., is that Linens will soon file for what is called a prepackaged bankruptcy.

In a prepackaged bankruptcy, the bankrupt company has already negotiated settlement deals with creditors before filing for bankruptcy.

A prepackaged bankruptcy, Shoulberg said, "would allow them to close some of their weaker stores" and "come out of it smaller but stronger."

Linens on Wednesday did not respond to a telephone request for comment.

The debt Linens incurred when it was taken private made it unable to weather the sales slowdown, Shoulberg said.

"Even when it was publicly owned, they did not generate tons of cash, so paying off all this debt, in a weakened retail situation, is absolutely a huge problem for them," he said.

Linens also has the misfortune "to compete against probably one of the two or three best retailers in the country, which is Bed Bath & Beyond," he said.

Several analysts who cover publicly traded Bed Bath & Beyond, which is based in Union, have been predicting for more than a month that a Linens bankruptcy is likely and could have a positive impact on Bed Bath & Beyond's market share.

Source: The Record online