Costa Mesa-based Anna’s Linens Inc. subleased 16 of its stores to Party City Corp., which plans to set up Halloween pop-up shops, according to documents filed with the U.S. Bankruptcy Court for the Central District of California in Santa Ana.
The lease deal, effective from Sept. 1 to Nov. 22, could bring $250,000 to the household-goods retailer, which filed for Chapter 11 bankruptcy protection on June 14.
Anna’s Linens had more than 2,331 employees and 252 retail locations throughout the U.S. and Puerto Rico prior to the filing. It hired Hilco Merchant Resources LLC in Northbrook, Ill., and Boston-based Gordon Brothers Retail Partners LLC in June to manage liquidation of all of its merchandise, store furniture, fixtures and equipment.
It held store lease takeover auction on Aug. 27 at the Los Angeles office of the retailer’s attorney. FP Stores Inc. in Gardena emerged as a successful bidder on 41 store leases. The deal included one Orange County location—2120 S. Bristol Street in Santa Ana.
Anna’s Linens sent “rejection of unexpired lease” notices to its other locations, which are generally holding going-out-of-business sales. The retailer has reserved the right to rescind the notices by Sept. 15.
Rockaway, N.J.-based Party City will pay $250,000 for rent on eight pop-up shops in California, five in Texas, two in Georgia and one in Louisiana. It will also reimburse Anna’s Linens for utility expenses and providing insurance for the duration of the lease.
The sublease to Party City “would be in the best interest of the Debtor’s estate and creditors, and will maximize the value of the Debtor’s assets for the benefit of creditors,” according to court documents.
Anna’s Linens plans to hold an auction of its intellectual property, which will include rights to the company’s name, trademarks, copyrights, domain names and customer lists, on Sept. 17.
