Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Off-Balance Sheet: Farewell, Linens 'N Things


The market for linens is strong. However, the thing market has gone the way of the Four-Tusked Mastodon.


Relax, it's only money. Here in the 'Ville we like to keep things smart, but we also love to laugh. All work and no know how it goes. With that in mind we give you The "Off-Balance Sheet," a place where Minyans can experience humorous takes on the world of finance, personal stories from our Professors and Minyans and all the other stuff that makes life worth living. So take a break from the flickering ticks and dive in.

Over the past two years, Linens 'n Things has seen its share of trouble, losing customers to Bed Bath & Beyond (BBBY) and Target (TGT), and struggling to adapt to an ever-changing marketplace. After going private in a $1.3 billion sale to Apollo Management, NRDC Real Estate Advisors, and Silver Point Capital Fund Investments, Linens 'n Things continues to disappoint.

We all know what the pundits are saying, what with the endless pontification about Linens 'n Things and how the company might turn the ship around. Everyone has a different idea. But from where I sit, the elephant in Linens 'n Things' room is plain as day.

The market for linens is strong. However, the thing market has gone the way of the Four-Tusked Mastodon.

A retail analyst I spoke with had this to say:

"Things enjoyed spectacular success for a number of years-everyone thought they were here to stay. But things turned out to be the pogo stick of our generation-a passing fad. Stuff is the hot seller today. Tchotchkes, doodads, and knick-knacks are also big. I hate to say it, but things are a thing of the past."

Everyone loves linens. It's things they can do without.

To make matters worse, the recent flood of low-priced things from China has all but shut down the U.S. thing industry.

Inexpensive Chinese things steaming toward our shores

"I made things for over thirty years," a former assembly line worker at now-defunct National Thing, Inc. told me. "My father was a union thing worker, his father was a union thing worker-things are in my family's blood. The day the thing plant closed was a terrible, horrible day."

The abandoned National Thing factory

Currently, Cincinnati-based Sheets 'n Stuff is the big man on the proverbial campus, booking record profits and expanding into Canada and Europe-with no end in sight. Occupying second and third place, respectively, are Phoenix, Arizona's Doodad Warehouse, and The Tchotchke Barn, out of Tallahassee.

Jeffrey McArdle, CEO of Sheets 'n Stuff, said he sympathizes with the situation in which Linens 'n Things finds itself, but is not particularly surprised.

"Things are out. Stuff is timeless. The public loves stuff and we can barely keep enough of it in stock," he wrote in an e-mail.

Linens 'n Things is also being squeezed by a tight supply of the raw materials used to make things, like plastics and aluminum.

"If prices don't relax, things-which are already virtually unsellable-may soon become luxury items only the very rich can afford. And that would hurt everyone; from people who design things, to thing development companies, down to the folks who haul things across the country in 18-wheelers," sighed Dennis Ahrens, president of Ahrens Thing Co., a Houston thing distributor.

Dennis Ahrens, during happier times

Where will things go from here for things? Has the thing bubble burst? All I can say is, the slow, agonizing slide of Linens 'n Things should be seen as a warning to others who thought the once-insatiable demand for things was here for good.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos