Can you imagine a mall in America without a Linens ‘n Things in it? A world in which Bed, Bath & Beyond doesn’t have to issue coupons in the Sunday papers because they have no real competition to worry about?
It could be a reality someday. Apparently Linens ‘n Things is in serious financial quicksand and sinking fast.
On April 15 the beleaguered home furnishings retailer announced that it would defer payment on its $16.1 million in interest payments and instead work with its creditors, bond holders and vendors in an attempt to avoid filing for bankruptcy.
According to the New York Times:
Since last fall, eight retailers — mostly midsize chains like the electronics retailer Sharper Image — have filed for bankruptcy. But a filing by Linens ’n Things, which has more than 500 stores in 47 states, would be the largest yet.
The payment that was due Tuesday applied to a $650 million issue of debt, comprising several senior notes due in 2014. But the terms of that debt include a 30-day grace period for payment of that interest. Linens ’n Things posted a $242 million loss for 2007 on sales of $2.79 billion.
If you or someone you know works for Linens ‘n Things, the prospect of some or all of their stores closing must be a scary thing.
What does it mean for shoppers? Well, there may be some major “Everything Must Go!” sales on the horizon. But for now, if you’re holding onto any gift cards from Linens ‘n Things, you may want to go ahead and use them. If the retailer ends up filing for bankruptcy, they won’t be legally required to honor them any more, as customers found out when Sharper Image closed abruptly in February.
Let’s hope they’re able to keep their doors open despite the odds. Looks like they’re trying to work it out and avoid bankruptcy. Even though Linens ‘n Things has never been my favorite store–I never liked the way it was set up and rarely found what I was searching for in it–I am all for having as many home furnishings retailers to shop in as possible! We need to have options, and Bed Bath & Beyond needs to have some competition, don’t you think?
MAY 2 UPDATE: According to Smart Money:
Linens Holding Co., the operator of Linens ‘n Things home furnishings retail chain, said Friday it filed for Chapter 11 bankruptcy protection with plans to shut 120 underperforming stores, becoming the latest retailer to fall under the weight of declining housing markets and other economic worries. The chain, which private equity firm Apollo Management LP bought for $1.3 billion in February 2006, will continue to operate without interruption. It also expects to be well stocked ahead of the back-to-school and holiday selling seasons as it secures $700 million in debtor in possession financing from General Electric Capital Corp.
UPDATE MAY 8: Is Bed Bath & Beyond next? Lots of people have been landing on this post after searching for “Bed Bath & Beyond Bankruptcy.” After doing some sleuthing, I’ve learned that there’s an e-mail being forwarded around that says BB&B filed for bankruptcy. As far as I can tell, there’s nothing to back this rumor up. If anyone has heard differently, please fill us in! Go to the Chronic Consumer to read more about this rumor.
UPDATE OCTOBER ’08: It’s official. Linens ‘n Things is closing its doors.
Photo via Wikipedia.
I just read about this (and Sharper Image — who knew) in the Wall Street Journal the other day. I have to admit I don’t know if I’ve ever shopped at Linens N Things, but I’ve always liked knowing it was there. And I agree that Bed, Bath and Beyond needs some competition. I also read that Bombay has gone from 3,000 employees to 20. All of these mall staples going away. Sigh. What’s next?? Express??
Sinking fast, you’re right. One thing to consider is the potential for gift card bankruptcy. Even though they are filing for bankruptcy, does not necessarily mean the cards will be void, just yet. By all means, use your cards. I had 150 to LNT, I spent it all on Monday night, in fear of a repeat of The Sharper Image incident. There’s more information about gift card bankruptcy at savvywallet.com
Thanks, Austin. That’s a good article at SavvyWallet you linked to. I hadn’t seen that one.
I’d say it’s smart to use those gift cards now like you did. Even if they continue to accept them for a while, if stores start closing and inventory begins to peter out, your options for spending them may not be as good in the future.
It is so terrible that they can get away with not honoring gift cards, but it is true.
I was sad to see Bombay go away too. I didn’t shop there a lot ,but it was great to go in there and get things quickly for the house instead of having to order them.
Also Borders and Barnes & Noble are locked into some type of price competition and it is likely that Borders won’t survive as they have been narrowly avoiding bankruptcy.
The worst part about it is that L & T has Nate Berkus’ line for the home. I really like his stuff!!
I was heartbroken over Bombay. Not so much over Linens and Things. But no more Nate Berkus? SAY IT ISN’T SO!!
Something to add, Red Envelope recently went under, Signature Days, UTIX, Sharper Image, Bombay is among one of them. It’s these obscure companies that are large enough to think they will be around forever, but who knows what will happen. Do you guys remember the days of Fedco and Broadway? I bet you my mom still has gift cards from these companies.
I agree about one of the worst parts being the loss of Nate Berkus’s line at LNT. I wonder if he could take it elsewhere?
Austin–I had no idea Red Envelope went under. I’m heartsick about that. I loved ordering wedding and birthday gifts for people from them and was counting on them for several upcoming occasions!
Bombay’s closure also saddens me, even though I admit I haven’t actually shopped there in a few years. I bought the round mirror that hangs over my family room mantel at Bombay, though, if any of you saw that (in the post called “Crown Molding Magic”).
Yes, my husband told me about it. Although they can file for bankruptcy and still continue to do business for a long time – many companies do. I rarely shop there – I find BB&B has more things that I like for some odd reason!
Manuela
I am so sad to hear there is no more Red Envelope. I can’t believe I missed that one. The other thing to let people know about when these companies start their liquidating measures is that most of the time they will stop accepting returns. So if you have a gift you aren’t happy with or something that doesn’t work time may be of the essence.
I read the article about LNT in the LA Times last week on my California jaunt. I don’t really care for either LNT or BB&B, but sometimes you need the stuff and I thought LNT had better stuff from my limited perspective. I had sort of forgotten about Bombay until they were on their last legs and didn’t have anything left with legs, LOL. Then I bought a couple of cute tassels for no money. I would be sad if Borders went away, they are closest in proximity to me and I love the SBC Mochas. That’s my take on this conversation. I am trying to catch up on reading while posting pix from my journey.
Janet
I believe stores will open and close. It’s just those gift cards is such a huge issue in itself. I was telling hookedonhouses that each year $100B is spent on gift cards alone and in 2008 $8B was unredeemed and lost. It’s amazing how much money we pour into these cards and lose track of it. We’re essentially throwing money away. The funny thing is, the retailers don’t get to claim it as revenue, until it is spent. Gift cards is technically a loan. It’s a complicated story. Let me know if you want some links about more gift card stats. ( don’t want to break the rules of posting) Until then, SPEND YOUR CARDS NOW!!!!
I have recently worked at Linens N things, Bombay and am now at Circuit City (I guess I have bad luck getting jobs) so I will throw in my two cents on each
LNT looks like it may be heading down the same path that Bombay went down. The LNT i used to work at was always top 10 in the company and now they are completely dead, cutting hours, and reduced their shipment from 2-3 full trucks per week to maybe 1 partial truck per week. I spoke with my old boss recently and he doesnt seem too optimistic about the companys future. So if you have an LNT gift card USE IT NOW!
I worked at Bombay for 3 years all the way up to the end and I hated the fact that I had to tell people that their gift cards were not worth anything anymore (one customer apparently had $300 on hers!). But I urge everyone to not get angry with the associates and managers of stores that are going out of business, I was an assistant manager and I can tell you we do feel bad about the no returns and unsusable gift cards but there is nothing they can do about it, someone actually got fired for giving in and doing a couple of returns. As for circuit city i’m am not sure about them, definitely not doing well at all but i dont think they will be filling any bankruptcy papers.
https://www.snopes.com/politics/business/bankruptcies.asp
You can usually find the truths you need at snopes.com
I used to get false forwards all the time and then i started returning emails with the snopes articles telling them the emails were false! I love this site!
Wow, at lot has happened since April. It’s now the end of May. Not only are retailers are going under, airlines are going under as well. I blogged about the falling airline industry on savvwallet.com a few weeks ago, and about 7 airlines file for BK. Imagine all the miles that are gonzo. Google Signature Days, and you’ll find a lot of people are furious. I started a review on yelp.com on signature days, people are losing 800-1000 bucks in gift cards. I agree with not getting mad at the people who work there. Update: Sharper image is accepting gift cards now, but you have to spend twice the value on it. KNBC did a piece on it a week ago. https://www.knbc.com/news/16333628/detail.html
Bed Bath & Beyond has not filed for bankruptcy, has no intentions to file, and has no need to file at this time. The difference between Linens ‘n Things and BB&B is that BB&B has zero debt, while Linens ‘n Things was operating pretty much totally on credit. So what does that mean? BB&B has the liquidity and the assets to weather a short-term downturn, while Linens does not. It’s like homeowners and the mortgage crisis–the ones who planned carefully and didn’t bite off more than they could chew in the event of a downturn are, for the most part, OK. The ones who thought the real estate gravy train would carry them through are now living under bridges.
Linens n Things has filed for bankruptcy because it’s poorly managed from the top. While they were cutting payroll on hours they ran low-salaried store managers and assistant managers ragged trying to keep up with the work load. Meanwhile, no one at the top was taking any cuts in pay. They sent the wrong message to their associates when they would make them wait hours for an executive visit (from a private jet)then pull up in a stretch limo directly blocking the front doors of the store during business hours. There were many examples of corporate waste over the past few years. Their backrooms were stuffed floor to rafter with old merchandise that had no home on the floor, often making it nearly impossible to process an incoming truck. One never got the sense that they cared much for their employees, or their customers.
I believe it had to do with management. No one seemed to really know what they were doing. I’ve been working in the company for 7 years and we’ve been through so many managers at our location. Not only was it the managers but they opened one at Vaughn Mills which was opened on holidays which I know killed our our sales at the Woodbridge Ontario location. Why put a store close to another one it makes no sense.
Some of us associates worked so hard and for what none of us ever got appreciated. Every time that we had a visit by head office all they did was picker and complain. I’ll be honest a lot of us associates were getting tired and felt run down so we gave up trying and I believe that that’s what killed us. The stores were beginning to fall apart look too crowded and messy. NO one wants to shop at an unorganized store.
I’ve even had a few guests that even complained that our prices were to high so they went else where. There is many reasons as to why LNT is in limbo now. I just feel sorry for those of us who depended on this job to help support our families.
I know it sounds terrible, but this isn’t all bad. I liked what Kevin Price of the Price of Business radio show wrote about it at http://www.BizPlusBlog.com. Some of this is just necessary.
omg the linen n things did go out of business its scary!