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Linens ‘n Things May Declare Bankruptcy, Don’t Hold Gift Cards!

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It took a while but LNT is liquidating its remaining stores as of October 14th, 2008.

Linen ‘n Things has filed for Chapter 11 bankruptcy, freezing $42M in gift cards.

We received many gift cards as wedding gifts (thanks!) and fortunately none of them were Linens ‘n Things cards because they’ll be filing for bankruptcy tomorrow ($15 million quarterly payment is due!). What does this mean for gift card holders? There is a possibility that Linens, as Sharper Image did, will suspend the acceptance of gift cards and anyone holding one will be left with nothing. Gift card holders are considered unsecured creditors during bankruptcy, which puts them after secured creditors and thus less likely to receive anything. You didn’t think you were lending a company money when you bought it, huh? :)

America has spent the last twenty five years in a state of heightened consumerism, with relatively few retailer busts. The probability that you could have a gift card from a publicly traded company go worthless was pretty slim. Suddenly, you have Bombay bust last year, followed by Sharper Image, and you start seeing that the little spending train we’ve been riding is starting to slow down and the risk of a gift card becoming worthless plastic go up. To be honest, I had no idea Sharper Image went under (though I never understood how they kept afloat, those gadgets were cool but expensive and hardly ever “necessary”) until long after they were liquidating. (anyone else with me?) Who has time to keep track of that? I don’t, I’d guess you don’t either.

So, the lesson of the day is to spend down those gift cards as soon as possible. We have gift cards from places like Macy’s and Bed Bath & Beyond (which is a store just like Linens ‘n Things), and while the future looks good for them (honestly, we have no idea how the future looks for them, it’s not like Linens ‘n Things was visibly struggling) you never know what can happen.

Need another reason to not like gift cards? This seems like a pretty strong one. Cash doesn’t expire and if the US Government ever declares bankruptcy, the least of your worries will be what Federal Reserve Note gets you in bankruptcy proceedings.

If anyone is currently working at LNT and would like to write about their experience, please contact me, thanks!

{ 33 comments, please add your thoughts now! }

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33 Responses to “Linens ‘n Things May Declare Bankruptcy, Don’t Hold Gift Cards!”

  1. saladdin says:

    I work for a publicly traded company along the lines of these guys. Actually, we are considered the same “sector.” And let me tell you it is getting scary. First, of course is job-wise but in a macro way I get to see the unofficial state of the economy. Surprise, it’s bad.

    saladdin

  2. Yikes, that is surprising to me. Sharper Image was also, at first, until I read several articles analyzing the situation and realized they had lost their gimmick — gadgets are commonplace now, and are made cheaper than ever. They can’t keep up with Apple and Nintendo and all these other companies with more useful gadgets. But I wouldn’t expect a store like Linens ‘n Things to go. I wonder if this reflects on the “impending” recession — that maybe people’s disposable income buys them less, so they’re cutting back on luxuries and unnecessary purchases. Definitely scary…especially after reading saladdin’s comment.

  3. Austin Chu says:

    Good post. Just because they are filing for bankruptcy, does not necessarily mean that the cards will be void. It’s simply too early to tell. I didn’t want to take the risk of the cards being void, so I spent mine online yesterday in fear of The Sharper Image Incident.

  4. ….if the US Government ever declares bankruptcy, the least of your worries will be what Federal Reserve Note gets you in bankruptcy proceedings.

    If that does happen, I guarantee the IRS will still be going strong! :)

  5. allison says:

    Ive worked at Linens N Things for a few years now and we have been through this once before. I have to say this time around it hits closer to home. I dont believe ALL stores across the nation will close all at once. If anything, they will look at profit-rent costs-location and cut losses there first. I would check the headlines next month, they should have some idea of what is to be done by then. They borrowed some extra time without filing for bankruptcy just yet:) I feel for the people stressed out about what they are to do, look for another job or hang for health benifit issues like myself. Please dont take offence when I say I could care less about your GIFT CARDS. There are worse things in the world to lose sleep over, thank you

  6. Lance Runnels says:

    I worked for LNT for 5 years. They are a poorly run corporation. Having worked for both Bed, Bath and Beyond and LNT, I can tell you there is no comparison. In nature the strongest survive and heading into a recession the same holds true within the business world. LNT is a poorly run company and thus should and will go under.

  7. Anonymous says:

    I am a current store manager with LNT and I have to say it is business as usual. We are still accepting Gift Cards and helping each guests that walks in the door. Is everyone on edge because of the Bankruptcy word, of course, but why are people so quick to make judgement? It’s hard to see my employees frustrated because of the non stop calls or people coming in and asking if they are going to lose their jobs. What would be great is if people would just shop like normal and not ask those questions. I am in one of the struggling markets due to lack of home sales, but I still have people shopping in my store. Give LNT a chance to work things through, don’t write them off yet. For those of you who feel that Bed Bath and Beyond is better, I would love to have you compare the cleanliness of my store to theirs. They are cutting payroll and their stores are starting to look bad. ALL retailers are struggling. You can’t blame everything on the management. Try placing some of the blame on George W and the creditors.

    • have labels but no printer says:

      FOR ALL LNT WORKERS/MANAGERS –

      I aquired labels during the liquidation but no printer and they do not fit the printer I have – What type of label printer was used a LNT stores?

      Thanks

  8. jim says:

    @Anonymous: I don’t think many people are writing off LNT but I don’t see why one would want to hold onto a gift card and leave it to chance. If I had any LNT gift cards, I’d be spending it immediately.

  9. Anonymous says:

    I also put years in at LNT & I believe the company is very POORLY ran. Upper management intimidates their employees and on numerous occasions cheat their employees out of sick time, vacation time and personal days because most managers are on huge power trips! I have never worked in an environment where management was so cruel, cold and completely uncaring. Perhaps this has lead to some of the problems with the company. Perhaps what goes around, will come around to them some day! You know the old adage “Do unto others as you wish they would do unto you.

  10. Anonymous says:

    The scary thing about Linens N Things is that contrary to the managers comments above, the company was doing very bad during the housing boom. The comps have been flat to down year over year for the past 5 years. The problems with the company go far beyond the current economic climate, it is just making it go from poor to awful. I really don’t see the company pulling out of this dilemma, and if the sell their most profitable division to their main competitor(Bed Bath) then it’s time to close up shop and call it a day.

  11. Anonymous says:

    I have to say that I have been a bit shocked about what is going on with Linen’s N Things. I have to say that this stores product is considerably better than Bed Bath and Beyond and do find the stores much cleaner and the staff much friendlier. Having worked in the buying offices of many retailers, it is often common for them to be very strict in their policies. This is usually due to the pressure of running an operation this big that’s open 7 days a week. I definately don’t miss working in that type of climate, however that is probably why I work on the manufacturing end now. I spent quite a bit of money in Linen’s N Things this weekend and spent $8 at Bed Bath and Beyond also this weekend. I hope that my retail therapy helps them pick up and save themselves. I would hate to only have Bed Bath and Beyond as my only choice. I’m keeping my fingers crossed for you Linen’s N Things!

  12. Kelli says:

    Honestly, Linens & Things & Bed Bath & Beyond have the same merchandise, in my opinion. BB&B might have a bigger tabletop department with bigger brands, but the overall brand assortment is almost identical. I recently bought a home and needed to buy new comforter sets, shower curtains, living room curtains etc. and they both had the same patterns at the same pricepoints, etc. I do not see a brand differentiation, so the only thing I can conclude is a) Bed Bath gives better customer service & b)the fact that BB&B mails out those 20% off coupons almost every week. They will always honor expired coupons and/or competitor’s coupons. And having worked for a company that distributes to them, I know that their employees attend many product knowledge trainings and are well versed in their brands. I do believe that is the difference.

  13. professor says:

    I am waiting on two gift cards (20 and 30) as part of the mail in rebate.
    I tried to call and get cash instead, but there’s no one who will take my calls. I keep getting routed to an automated phone.
    I am nervous waiting on these lame gift cards.
    I wish I had never walked into their store.

  14. jomby says:

    LnT is closing 120 out of 589 stores. LNT.com will accept gift cards as payment-so DON’T FREAK OUT!

    Chillax! So you might lose a few bucks. We are losing our jobs.

  15. Anonymous says:

    I was a General Manager for LNT for 3 years and though that I would be there for the rest of my retail career. I agree with some of the previous comments left. To say the company is mis-managed is a understatement. The nepitisum runs wild, the way they run payroll to the bone (especially through the wage management initiative back in 04-05), using “as seen on TV” products as a major brand statments in the store and the list go’s on and on. Its insane and everybody wonders why they are in the poor shape they are in? NOT ME. I saw it comming and thats why I got out and found another company to work for that is glad to have me and what I bring to the table. They constantly pounded on the management of the stores for not performing P&L wise and HR would tie the hands of the management of the stores from recruiting better AM’S, OM’s, and hourlys. They would also hinder the GM’s from disapline bad apples frome fear of law suites.It was a double edge sword, you were held accountable but given no resources to fix the problem, just empty words. This is were the problems started 5 or 6 years ago and anybody who worked for the company back then should agree if you are being honest. Thats when they had promiss and you felt like you were working for something. Thanks for the great times Kazmi – NOT

  16. Anonymous says:

    I think those who are so concerned with their gift cards need to realize that the people who work at Linens and Things are facing the fear of losing their JOBS. Theres a bigger issue here than the gift cards. A huge retailer is suffering, what does that mean for local businesses and other retailers? I currently work for Bed Bath and Beyond (have worked for LNT in the past) and though they are our direct competitor, I wouldn’t wish this upon any of their employees. Just remember next time you go in a store that the people working there are PEOPLE. Treat them nicely!

  17. Brian says:

    As of May 5th, LNT gift cards are still valid in its (remianing) stores, though it dosen`t mention redeeming it online. Click my name for the press release.

  18. Anonymous says:

    people need to chill out.
    only some stores are closing.
    gift cards are still being accepted.

    …and of course you’re not going to get cash instead of the mail in rebate gift cards…

    it’s not that serious.

  19. Mousey2k1 says:

    Basically, this is a lesson to everyone for future reference. Gift cards are just a bad idea these days. Because you never know when a company will go under or which companys will. You cant forsee the future. Its better to give cash as a gift to someone then a gift card period. If stores cant stay competitive and keep debt out of their system with proper management then they are bound to go under eventually. As our economy goes into recession we will begin to see alot of the stuggling companies go under. The first will be the small frys, then the stores of non essential high priced items. The ones that will stay strong and weather this store will be the ones with essentials at competitive prices. And I think we all can agree on which ones those are.

  20. Anonymous says:

    I’ve read of all of these comments and I’m sorry to hear that the employees are having a hard time. It’s weird – because the best customer service I’ve had is from Linen n things!! I hate going to BBnB because of their customer service. I will continue shopping at Linen n Things…. as long as the store is open! I hope that everything will turn out okay for all of the employees!

  21. FormerWorker says:

    I worked for LNT for 3 years during college, where I could see this day coming during my studies in business and finance. I learned that poor investment choices yield poor returns. Thus, a company that chooses to sell cheaply made “from TV” items, cat toys that have a remote, food items that don’t sell and expire on the shelves, and $22 candles is bound to end up in this situation. Not to mention that any item, no matter how old, will be taken back in a return if the customer can come up with a mildly legitimate story or make a scene. I remember the back room being packed with “damaged” items that could not be re-sold from customer returns. There also was only one functioning security camera at the time, which led to hundreds of stolen items. We knew this because we found the empty packaging in the bathroom toilets and trash cans. It is remarkable to me that it took this long for the company to begin to sink. Would you spend $140 on a trash can? $500 for a vaccuum cleaner? $30 for a set of plastic stairs so your dog can get on the couch? There will always be some people that would say yes, but as we can see with this company’s demise… most will not.

  22. Transports says:

    It’s not that gift cards are “bad” it’s the fact that you people just hold on to them for so long……..boy that’d be a different story if that was cash in your greedy little hands.

  23. Transports says:

    Oh yes that’s a good one about customer returns, maybe the day will come when YOU as a customer will not get your behind kissed just for shopping there. Wait until we have only one food store, one clothing store etc. then when you want to return something because YOU did something stupid and broke it…….heaven forbid a consumer would read the instructions. Then non of you idiots will get your money back…….

  24. Anonymous says:

    all i want to know is when will the sale start? ;p

  25. Anonymous says:

    I’ve been a manager for LNT for 5 years now and I can tell you things are very tense. Even though no stores in our area are slotted to close, the employees are very concerned for the future.
    I think a major problem are the scum bag thieves trying to return stolen merchandise and using altered ID’s. They assume we are idiots and don’t know what they are doing. There only concern is supplying there obvious drug habits…I’d love to throw them out on there asses, or go to their jobs and harass them.


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