Specialty retailer Linens 'n Things, which filed for bankruptcy protection in May, plans to begin liquidation sales at its stores as early as Thursday after failing to find a buyer that wanted to operate the company.
“It's a straight going-out-of-business liquidation sale,” said James Schaye, president and chief executive of Hudson Capital Partners, one of the members of the investment group buying the company's assets.
He expects the process for the company's approximately 371 remaining store locations will take about 11 weeks. Linens 'n Things operates six stores in the Charlotte area, according to the company's Web site.
Last week, the Linens Holding Co., the parent of Clifton, N.J.-based Linens 'n Things, said it would put itself up for a sale in an auction on Tuesday.
The company agreed to a preliminary “stalking horse” bid from a joint venture between Gordon Brothers Retail Partners LLC, Great American Group LLC, Hilco Merchant Resources LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC for about $475 million for its assets.
A stalking-horse bid is an initial offer on a bankrupt company's assets from an interested buyer chosen by the company. Linens 'n Things planned an auction including the initial bid along with others for its assets on Tuesday, but since it received no other qualified bids, it canceled the auction, according to documents filed late Monday with the U.S. Bankruptcy Court for the District of Delaware.
After facing weak sales and a slumping home furnishings market, Linens 'n Things filed for Chapter 11 bankruptcy protection in May. In August, the company said it reached a plan of reorganization with the bankruptcy court.
However, it later decided to auction its assets as conditions in the financial markets worsened.