It's almost closing time - for good

Linens 'N Things sinks, takes down 6 area stores

With every sale, workers at six area Linens 'N Things are one step closer to the unemployment line as the national retailer liquidates its inventory and prepares to permanently shut its doors, despite the approaching holidays.

Crushed by an economy that has stopped consumers from spending, Linens 'N Things is closing 371 stores nationwide, including those in Burlington, Reading, and Chelmsford, and in Nashua, Salem, and Bedford, N.H., where everything from toasters to light fixtures is being sold at reduced prices.

Year-over-year retail sales dropped 0.9 percent in October, according to the International Council of Shopping, signaling a dismal outlook for retailers and prompting forecasters to downgrade holiday sales expectations.

In May when consumers were already clutching their pocketbooks, Linens 'N Things filed for bankruptcy protection. But troubles mounted for the housewares retailer when the economy crumbled in September.

Declining sales compounded by frozen credit markets sent the chain into a tailspin and it could not recover.

The retail stores will all close as soon as the inventory is gone, said Richard Kaye, executive vice president of the HilCo Merchant Resources LLC, a Chicago-based company hired to sell the stores' assets. Kaye said there is no set deadline for the closings, but that "as a rule of thumb we can say between six and eight weeks."

In Burlington, however, where the liquidation began in August, the store is expected to close this weekend, as discounted savings soared to 70 percent this month.

"We are currently working with retailers to fill the space," said Julie Culbreath, communications director of Edens & Avant of Columbia, S.C., which owns the shopping center. Culbreath said Linens occupies about 38,000 square feet at 43 Middlesex Turnpike; the lease expires in January 2017.

Liquidation sales at the remaining stores began on Oct. 17 with discounts of 10 to 30 percent on towels, sheets, kitchenwares, and other household items. Stores are located throughout the country, and inventory and fixtures are valued at $1 billion, according to Kaye.

On Dec. 31, 2007, the Clifton, N.J.-based company, was operating 589 stores in 47 states and employing about 17,000. In the second quarter of this year, it filed for Chapter 11 bankruptcy protection, and closed 120 stores. Along with joint venture partners Gordon Brothers Group, Hudson Capital, SB Capital Group LLC, Great American Group LLC, and Tiger/Nassi Group, Hilco paid $475 million for the assets.

The Linens chain had sought a buyer to keep the stores in operation. But in September when banks stopped lending money as the economy sunk, interested buyers could not secure credit to close the deal. Kaye said that with the decline of the real estate market earlier this year, retail customers had begun shopping down a notch from their customary level.

"We're seeing stress in all sectors of retail," he said, "particularly the home furnishings area, jewelry, housewares - anything that is considered to be a discretionary expenditure is suffering and will probably continue to suffer at least through the holidays."

Locally, the closings will leave a total of about 200,000 square feet of prime retail space available.

The Reading facility opened inside 22,000 square feet less than four years ago at the same shopping plaza on Walkers Brook Drive where Jordan's Furniture opened its fourth store in 2003. The Reading lease ends in January 2016.

The Nashua location at 261 Daniel Webster Highway is a stone's throw from its competitor, Bed Bath & Beyond at 268 Daniel Webster Highway. The chain occupied 38,000 square feet under a lease that terminates in 2013.

In Chelmsford, Linens 'N Things has occupied about 26,000 square feet at the Chelmsford Mall since 2003. Its lease expires in 2014.

In all, Massachusetts hosted 20 Linens 'N Things stores, and New Hampshire was home to a store in Concord and one in Portsmouth. DJM Realty of Melville, N.Y., a Gordon Brothers Group company, is handling the disposition of the leases.

The store in Salem, N.H., occupies 35,000 square feet at 290 South Broadway.

The one at the Granite State's Bedford Mall is 41,000 square feet.

The company was scheduled for a motion hearing last week in bankruptcy court to allow an auction on Dec. 4 and a sale hearing on Dec. 15. Discounted boxes containing electric blankets were neatly stacked toward the ceiling on a recent Saturday inside the Chelmsford store.

But in Burlington where merchandise has been picked through since the summer, merchandise was in complete disarray, said a cashier who answered the phone earlier this month.

Each store employs about 25 workers, according to Rich Tauberman, a Linens spokesman. The retailer has no way of providing other employment opportunities for them, he said.

"The whole company is shutting down," he said. "All 371 stores are closing, so unfortunately there's no opportunities."

Joyce Pellino Crane can be reached at crane@globe.com.