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Citing economic pressures on the home furnishings market, Linens ’n Things has filed for bankruptcy, but, with $700 million in new financing, plans to be well stocked with merchandise as it reorganizes.
Citing economic pressures on the home furnishings market, Linens ’n Things has filed for bankruptcy protection but, with $700 million in new financing, plans to be well stocked with merchandise during a financial reorganization, the company says. The company has named restructuring expert Michael F. Gries as interim CEO, replacing Robert J. DiNicola, who is now executive chairman.
The retailer, No. 151 in the Internet Retailer Top 500 Guide, plans to close 120 underperforming stores, or about 20% of its chain. As of the end of last year, the company operated 589 stores in the U.S. and Canada.
Linens Holding Co., which operates as Linens ’n Things, recently filed a voluntary petition under Chapter 11 of the bankruptcy code in the U.S. Bankruptcy Court for the District of Delaware. The filing affects only the company’s U.S. operations.
“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 says.
The home furnishings chain will continue to operate without interruption during the reorganization and expects to be well stocked with merchandise for the back-to-school and holiday shopping seasons, the company says. It has secured $700 million in debtor-in-possession financing from General Electric Capital Corp. and is working with vendors to ensure a steady supply of merchandise, the company says.
The retailer also promoted David Coder, executive vice president, store operations, to president and chief operating officer. “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,” DiNicola says.
Gries, who founded restructuring advisory firm Conway Del Genio Gries & Co., will serve as the retailer’s chief restructuring officer in addition to interim CEO, the company says.
Linens ’n Things expects to receive authorization from the bankruptcy court to continue paying its employees and honoring gift cards and store credits, the retailer says.