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CLIFTON, NJ-Linens ‘n Things is filing for Chapter 11 bankruptcy protection and closing 120 of its 589 stores, in a move that retail observers have anticipated for months. The closings are taking place in 34 states, and management did not give a timeline as to when they will be shut.

The state impacted the most by the move is California, with 27 units closing. Texas follows with 10, and Michigan will lose nine Linens.

Management filed for bankruptcy due to “the impact of the current economic downturn on the Company’s operating performance,” according to a company statement. The retailer has secured $700 million in debtor-in-possession financing from GE Capital Corp. to continue operating its remaining stores. The company’s nearly 40 stores in Canada are not part of the filing.

Linens posted a fourth-quarter net loss of $62 million and a $242.1-million plunge for all of 2007. Same-store sales fell 1% year over year during the fourth quarter and 3.4% over all of last year.

Linens’ board elected Michael Gries, founder of turnaround firm Conway Del Genio Gries & Co., chief restructuring officer and interim chief executive officer. Chairman and CEO Robert DiNicola moved to the position of executive chairman.

Linens was taken private in 2006 after a $1.3-billion buyout by Apollo Management and NRDC Real Estate Advisors.

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