Linens ‘n Things, struggling to work its way out of bankruptcy, has apparently become the latest victim of the global credit crunch.
The home goods retailer was unable to find a buyer who would operate its remaining stores as a going concern. So, it has decided to throw in the towel, along with the wash cloths, napkins, food processors, and other kitchen and bath items. It will simply liquidate the rest of the company’s stores as early as Thursday, according to Reuters.
The wire service reported that the Delaware bankruptcy court planned to hold an auction for interested bidders today, after a group of liquidators that included Hilco Merchant Resources had made a preliminary $475 million offer. However, no other buyers submitted qualified bids and the auction was canceled, according to Reuters, citing court documents.
The demise of Linens ‘n Things results in part from the credit crisis, which prevented possible buyers from getting the credit to fund a purchase, Reuters noted. “If capital markets weren’t so tight, I think this chain might possibly have survived,” James Schaye, president and chief executive officer of Hudson Capital Partners, a member of the liquidator group, told it. “There’s just no financing to do these deals at all.”
Linens had filed for bankruptcy in May. In early September, it agreed to a reorganization plan that had the support of senior lenders and its official committee of unsecured creditors, along with an ad hoc committee of the senior noteholders. The company had expected to emerge from bankruptcy in early 2009.
Linens ‘n Things had 2007 sales of about $2.8 billion. As of year-end 2007, it operated 589 stores in 47 states and seven provinces across the United States and Canada. When it filed for bankruptcy, the company said it would close 120 underperforming stores.