This will probably go down as a brilliant buy down the road:
Linens ‘n Things, the home goods retailer which shut its doors late last year, may live on as a brand name after two investment groups agreed to purchase the retailer’s name and logos for about $1 million.
At a bankruptcy auction earlier this month, Hilco Consumer Capital and Gordon Brothers Brands, won the rights to the company’s intellectual property, including software, technology and marketing material, according to a Hilco spokesman. The deal was expected to close on Monday, the spokesman said.
Hilco Merchant Services and Gordon Brothers Retail Partners were members of a group of six liquidators that ran the going-out-of business sales at the home goods retailer last year.
Hoping to cash in on consumer attachment to forlorn brands, in the past few years liquidator groups have bought up trademarks of bankrupt companies like gadget seller The Sharper Image, and furniture retailer Bombay Co.
Since Hilco bought The Sharper Image brand at a bankruptcy auction in May, it has signed licensing deals for heated blankets, iPod cases and health gadgets — all of which are sold emblazoned with The Sharper Image logo.
Linens ‘n Things, once the no. 2 U.S. home goods chain after Bed Bath & Beyond Inc (NASDAQ:BBBY) was bought out for $1.3 billion by Leon Black’s buyout firm Apollo Management in 2006.
The company filed for bankruptcy protection in May, citing a drop in consumer spending. It had operated 589 stores in North America at the end of 2007, but liquidated late last year after it was unable to find a buyer.
Linens went under not because it had no customers, but because when the economy slowed, the company could not get enough to service the crushing debt load. Had it never been bought out, one could argue and probably be accurate in saying it would still be around.
The buyers have a respected and liked name and a whole bunch of real cheap real estate out there owned by desperate landlords......a nice combination.
Disclosure: No position