Gift Card Alert: Linens and Things going out of business?
April 25, 2008 in Bankruptcy & Gift Cards, General |
According to this story, Linens ‘n Things may be going under soon. There is speculation that the company may file for bankruptcy if it does not find a buyer soon. If you currently have a Linens ‘n Things gift card, now is the time to use it or lose it. Actually, if you have a gift card you’ve been holding on to for a while, you might want to use it soon.
Considering that we are already in a recession (i don’t know why the government won’t just come out and admit what majority of consumers already know and feel) and don’t know how long it will last, many struggling retailers may have no option but to file for bankruptcy protection.
When a company files for Chapter 11 bankruptcy, federal law allows the company to stop honoring gift cards. However, the company may petition the bankruptcy court to continue the redemption of gift cards. My advise is that when buying a gift card, keep your eyes and ears open regarding the company you are buying from. Avoid buying gift cards from companies that are struggling as you may loose your gift card should the company go under.
To show you how serious things can get, AOL recently asked its users to predict which national retailer may be next to go under. While this is just user opinion, it is not hard to spot trouble with a retailer. When you visit the store and you are always the only one shopping, you know something is wrong. Below are the companies that made the list from the AOL survey:
The Gap
Kmart
Sears
Office Depot
Circuit City
Dillard’s
Starbucks
Hallmark
Wilson’s Leather
Linens ‘n Things
BJ’s
Victoria’s Secret
Mervyn’s
RadioShack
Albertsons
Old Navy
The Bon Ton
Boscov’s
The Children’s Place
Ross
JCPenny
Blockbuster
Things Remembered
Rite Aid
Pep Boys
Staples
Michaels
Pier 1
Rack Room Shoes
Nine West
Jo-Ann Stores
Borders
Of the retailers mentioned above, my own prediction is that in addition to Linens ‘n Things, The Gap, Circuit City, Sears, Kmart, Pier 1, and Office Depot are more likely to bite the dust. The least likely is Starbucks. I know Starbucks is struggling but they are far from bankruptcy.
Readers, do you agree with the AOL list? Is there a retailer you would like to add to the list? Post your comments in the comments section below.
- Press My Buttons !
Yes! Tell the world. I commented on this on our blog at savvywallet.com a few days ago. Since our company tracks and manages gift cards, we sent users who were holding LNT gift card little notices about the bankruptcy news. Since The Sharper Image incident hit us by surprise, we wanted to be careful with our own supply of gift cards.
[...] though the company was on a recent list of retailers at risk of going under during the recession, i do not believe the company is going to file for [...]
Circuit city is a top 500 Company , what are you guys smoking?. This store will never close.
[...] my wife has a $100 Linens ‘n Things gift card which went missing after I reported about the possibility of the company going under a couple of weeks ago. We found the card this morning (how ironic) and we plan to use it [...]
know it all, i don’t think Circuit City is too big to fail. There are several examples of big companies that have gone bankrupt.
Sometimes, it may not be the business model but factors outside the company’s control. Look at what is happening to the airlines. Even though one may say their model may not be the best, record gas prices has driven big airlines like Delta to seek bankruptcy protection. The current recession, record gas prices, housing collapse, increasing food prices may all cause consumers to cut back on spending and that may be all it takes to cause many retailers to go under. That is what has happened to Linens and Things, which had no choice but to file for bankruptcy protection.
Know it all — you are correct, Circuit City is not filing for bankruptcy. I work with them and I know that is just a rumor.
Your earlier “the sky is falling” prediction turned out not to be true. I subscribe to another Gift Card Blog (www.GiftCardTracker.blogspot.com) who pretty much told it the way it really is. My wife, in fact, has (or, I should say “had”) a Linens ‘n Things Gift Card that we were able to redeem today at our local New Jersey location.
Karl Hoover, i did follow-up with another post (http://www.giftcardblogger.com/gift-card-alert-linens-and-things-files-for-bankruptcy/) which talked about the fact that LNT is seeking permission from the bankruptcy judge to continue to accept gift cards. I also mentioned that i called a local store and they were still accepting gift cards. Just an FYI…..
GiftCardBlogger: Yes, you did state this in your post of the other day…but in this original post of 04/25 you stated that if you have a Linens ‘n Things Gift Card, “now is the time to use it or loose (sp) it.” That is clearly not the case; not everyone that falls in to Chapter XI Bankruptcy is going to stop accepting their gift cards. In actuality, there are a lot of national retailers in bankruptcy protection that are still accepting gift cards. What happened at Sharper Image was the somewhat rare exception. And the list you purblished…that is a joke! While there may be a couple of businesses on the list who are in serious trouble, the majority are just experiencing downturns, due to the economy. Most folks on Wall Street are betting they will put together what it takes to pull thru.
Karl Hoover, thanks for catching the spelling error
The Gap aint going nowhere, Old Navy will carry that company like a mug.
The Gap inc. is a strong company, they are no were near going out, Old Navy, and Banana Republic are doing well. Ross has just opened a lot of new stores and is also doing well in a economy gone south.
City Chick, do you think Ross may be doing well because they target different markets?