Lechters

(LECH)

will close 166 stores and lay off 725 workers as part of a massive restructuring plan, the company said Friday.

Lechters, which is based in Harrison, N.J., will discontinue its Costless Home Store concept and the accompanying 11 retail stores. The company will also close 155 underperforming stores, including 128 Lechters locations and 27 Famous Brands Housewares Outlets. The remaining 83 outlet stores will handle closeouts, markdowns and clearance items from Lechters core business.

After the closings, Lechters will have 241 stores in 38 states, plus the 83 outlets.

Much of the restructuring will be possible with a new $85 million credit line from

Fleet Retail Finance

and

Back Bay Capital Funding

.