Back in late 2005, Linens 'n Things decided to go private in a $1.3 billion deal. The private equity sponsor was Apollo Management.The goal was to revamp the operations and ultimately get a big payday.
Well, things have not progressed so smoothly. Today, Linens 'n Things reported its Q1 results (the company still reports with the SEC because of its publicly traded bonds).
There was a net loss of $58.2 million, which compares to a net loss of $65.5 million in the same period a year ago. Revenues dipped 4% to $571.6 million.
What is particularly troubling is the same-store sales trend. That is, it was down 5.2%.
This is not to imply that the deal is imploding. Although, in light of the weak performance, it's probably going to take much more time for Apollo to get a return on this investment. And, it may be a warning for other firms thinking of doing retail deals.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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