Linens 'n Things

Linens 'n Things' 2008 liquidation preceded Bed Bath & Beyond's collapse by 15 years but shared the same fundamental weakness: a home goods format squeezed between premium specialists and discount competitors. The company operated 500 stores at its peak but couldn't differentiate from Bed Bath & Beyond or compete on price with TJ Maxx and HomeGoods. When Apollo Management's leveraged buyout loaded the company with debt, the margin compression became fatal. The mechanism failure was private equity extraction in a declining sector. Apollo paid $1.3 billion for Linens 'n Things in 2006, funding the purchase with debt that the company's operations couldn't service. This is parasitic loading—adding obligations that consume operational margin while providing no operational benefit. When the 2008 recession hit, Linens 'n Things had no reserves to weather demand decline. The company's liquidation benefited Bed Bath & Beyond, which absorbed market share and store locations. This demonstrated how retail extinctions often benefit surviving competitors rather than disappearing entirely—resources transfer rather than evaporate. Bed Bath & Beyond's eventual 2023 bankruptcy suggests the entire home goods retail niche was shrinking; Linens 'n Things just died first.