Linens 'N Things files for Chapter 11

CLIFTON, N.J. Linens 'N Things, the nation's second largest vertical home goods big box retailer, took drastic measures Friday by announcing that it is filing for bankruptcy protection as it seeks to reorganize, and save, its ailing business.

As part of the reorganization, the company has announced three pivotal changes:

1) The closing of 120 underperforming stores, or roughly 20% of its North American store portfolio. (None of the closings affect Linens' Canadian operations, the company reported.)

CLICK HERE FOR COMPLETE LIST OF CLOSINGS 

2) The securing of $700 million in debtor-in-possession (DIP) financing from General Electric Capital Corp., which the company says will "ensure healthy merchandise flow as [it] prepares for the back-to-school and holiday selling season."

3) The naming of Michael Gries, a noted financial restructuring expert, to the newly created position of chief restructuring officer and interim ceo. (Current ceo Robert DiNicola has been named executive chairman and current evp of store operations David Coder was appointed president and coo.)

"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 DiNicola. "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."