LNT seeks second round of store closings
July 9, 2008-- Home Textiles Today,
Wilmington, Del. – Struggling specialty retailer Linens ’n Things is seeking bankruptcy court permission to conduct a second round of store closings in early August, in which 87 locations would be shuttered in addition to the 120 units already being closed.
If approved, the order will result in LNT closing more than one-third of its pre-bankruptcy 589 store base.
“The proposed store closings will dramatically reduce the administrative costs associated with these underperforming stores [and reduce] … the debtors’ secured debt,” the company pleaded in a motion filed July 3.
LNT has not yet identified which stores it has targeted for closing and told the court it would file a list later. A hearing on the motion and bid procedures – similar to those authorized earlier for the first round of closings, including the use of a possible stalking horse bidder – is scheduled for July 11.
“The closing stores lose money and are a drain on liquidity,” LNT argued in the court papers. The company also argued that delays in the store closings could cause inventories to become “unbalanced or out of season” and would increase inventory “shrink.” The retailer said holding the GOB sales as early in August as possible should have a positive impact on the amounts that liquidation firms would pay, since they will be able to take advantage of the back-to-school season, according to the filing.
Several objections have been filed to the request, primarily from shopping center and real estate interests.