Home retailer Linens Holding Co., the operator of Linens 'n Things filed for Chapter 11 bankruptcy Friday, blaming declines in the housing market and in consumer spending.
The Clifton, N.J., company, which private equity firm Apollo Management LP bought for $1.3 billion in February 2006, will continue to operate without interruption. The struggling seller said it has secured $700 million in financing from General Electric Co's GE Capital affiliate to ensure it can stock its stores with merchandise for the back-to-school and other holiday shopping seasons.
The struggling seller of textiles, housewares and other home goods noted losses of $191 million on sales of $2.8 billion in 2007.
Chief Executive Robert DiNicola will become executive chairman and restructuring expert Michael Gries will take over as chief restructuring officer and interim CEO.
Retailers of home-related goods, including Bed Bath & Beyond Inc and Williams-Sonoma Inc, have struggled in the wake of the U.S. housing crisis and global credit crunch.
Linens 'n Things said it expects the bankruptcy court to allow it to continue paying employee salaries and honor gift cards.
The chain, which is owned by private-equity investors, employed 17,500 people and operated 589 stores in the U.S. and Canada as of the end of 2007. According to a court filing, the company plans to close 120 stores as the company attempts a turnaround.
The Securities and Exchange Commission filings say members of Linens 'n Things' pre-Chapter 11 bank group were Bank of America Corp., Wells Fargo Corp., CIT Group, UBS AG, Wachovia Corp., UPS Capital Corp. and Bear Stearns Cos.