Soiled Linens: No. 2 Home Chain Talking Liquidation

CLIFTON, N.J. The die is cast for Linen’s N Things. In the long-running saga to save the nation’s No. 2 vertical home goods retailer, a decisive move was taken Tuesday that should resolve the fate of the company once and for all.

Having failed so far to attract a suitor for the 371-unit chain, the company is now giving any remaining potential “stalking horse” suitors an ultimatum: Decide now, or we liquidate within a week.

That message was glaringly clear Tuesday when Linens’ chief restructuring officer Michael Gries asked permission of the bankruptcy court to auction its remaining 371 stores as early as Oct. 14 and begin going-out-of-business sales two days later on the 16th. Bankruptcy Judge Christopher Sontchi has scheduled a hearing on the matter for Friday, Oct. 10. 

According to a report from the Bloomberg News Service, the company may be advocating a quick and expeditious liquidation process in the interest of beating other ailing retailers to the punch.  Bloomberg cited Gries as telling the court, "We knew there would be other liquidations that were also going to take place," adding that the company would want to position itself appropriately in the current “buyer's market."

The once-public company was purchased and taken private by Apollo Management in 2006.  At the time the deal was consummated, Linens 'N Things, which operated 542 stores in 47 states in the United States and six provinces in Canada, told Retailing Today, "the underlying fundamentals of [the company] remain strong, including strong brand name recognition, attractive real estate locations and the fundamentals of the industry are very favorable."