Home-furnishings store to close
By Jeff Kiger
The Linens ’n Things store in Rochester is the latest local victim of national corporate woes.
The Clifton, N.J.-based bedding and home-furnishing retailer filed a petition Friday in bankruptcy court in Delaware and said it would close 120 underperforming stores, including stores in Rochester and Woodbury, Minn.
"The store will wind down in the next couple months," says Susan Kenny, representing the company. Linens ’n Things has 27 employees in Rochester.
The store at 1220 16th St. S.W., managed by Angie Vandyke, opened in August 2005. It occupies half of the renovated former Econofoods South building with Cost Plus World Market in the other half. Building owner Inland Real Estate Corp. of Oak Brook, Ill., already has signs up looking for a replacement tenant.
Linens ’n Things is the latest corporate casualty to be short-sheeted in Rochester.
Dallas-based Brinker International closed Romano’s Macaroni Grill on the west side of Apache Mall in March as part of an overall deal to sell the chain.
Children’s Place Retail Stores closed The Disney Store in Rochester’s Apache Mall at the end of January due to corporate concerns.
Ken Perkins, president of research company RetailMetrics LLC, told the Associated Press that the Linens ’n Things bankruptcy stems from a combination of operating issues and the lagging economy.
"There’s clearly a shakeout going on in the retail industry which will continue through the rest of the year," he said. "I think the weaker players are going to be in difficult shape here."
He said economic factors such as the decline in the housing market, tightening credit markets and a downturn in consumer discretionary spending, particularly in the housewares and home furnishings sector, led to a "precipitous decline" in profitability and liquidity.
The filing is expected to be a boon to rival home-furnishings retailer Bed, Bath & Beyond Inc., which has a store in Rochester.
But the news is not as good for Linens ’n Things’ parent, New York private investment firm Apollo Management. Apollo took the company private in 2006 for $1.3 billion.
"The rapid spread of the retail recession caught Apollo and other Wall Street firms by surprise," said Burt P. Flickinger III, managing director of the consumer industry consulting firm Strategic Resource Group.
Consumers are likely to lose out as well. Brian Riley, senior analyst at research firm The TowerGroup, estimates the filing will freeze about $42 million in consumer gift cards, affecting about 400,000 customers. Gift cards become valueless when a company files for bankruptcy protection.
Linens ’n Things, which operates about 589 retail stores in 47 states, joins specialty retailers Sharper Image Corp. and Lillian Vernon Corp. in seeking bankruptcy protection.
And Flickinger told the Associated Press this might be just the beginning.
"There is going to be a record number of store closings through bankruptcy in the next 150 to 1,500 days as the retail recession becomes the worst the U.S. has seen in 30 years," he said.
The Associated Press contributed to this report.