Linens 'n Things to Throw in the Towel
Home retailer Linens 'n Things is expected to file for bankruptcy protection by early next week, according to reports, a warning sign for retailers already struggling in the economic downturn.
The Wall Street Journal
reported Friday that the Clifton, N.J., retailer was expected to file for Chapter 11 bankruptcy-court protection by Tuesday, quoting several people close to the matter. Formerly a publicly-traded company, Linens 'n Things was acquired by private-equity group Apollo Management in Feb. 2006 for $1.3 billion.
While not a complete shock to investors, the move would mark the first major retailer to seek protection. Signs of trouble for home-furnishings retailers popped up recently when competitor
Bed Bath & Beyond
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offered a
for its fiscal first quarter. Shares of Bed Bath & Beyond were off 1.4% in early trading.
Linens 'n Things would become the second retailer in as many months to file for bankruptcy protection. In late February, electronics gadgets retailer
Sharper Image
(SHRP)
under Chapter 11 of the bankruptcy code in the Bankruptcy Court of Delaware.
The moves comes a day after most retailers
reported same-store sales results
for March, with many blaming declining numbers on the weak economy as well as the Easter holiday.
Wal-Mart
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, the world's biggest retailer, bucked the trend by raising its first-quarter continuing operations profit forecast to a range of 74 cents to 76 cents a share from its prior outlook of 70 cents to 74 cents.
However,
Target
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,
Kohl's
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,
Gap
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and apparel retailer
American Eagle
(AEOS)
posted sliding comp sales that sank shares during Thursday's session.
Linen's private-equity owner Apollo on Wednesday filed with the
Securities and Exchange Commission
.