Costa Mesa-based Anna’s Linens Inc. is preparing to file for bankruptcy, the Wall Street Journal reported.
The home goods retailer has hired Los Angeles-based law firm Levene, Neale, Bender, Yoo & Brill LLP to help with the process.
The company is seeking a lead bidder for its stores but could liquidate some of them, the report said.
That report and a second one on a retail trade news website attributed the company’s woes to general retailers selling more linens and to a lack of ecommerce efforts by the company.
Founder and chairman Alan Gladstone founded Anna’s Linens in 1987. It has about 300 stores in about 20 states and Puerto Rico, and 3,200 employees.
The company filed for bankruptcy in 1993 and emerged from the process in 1994.
In 2002, when it had about 80 stores, it sold 25% of itself to San Francisco private equity firm Rosewood Capital for $25 million to open 60 stores and pay down debt.
The founder’s son, Scott Gladstone, was promoted from president to chief executive in January 2014.
Anna’s Linens signed an $80 million credit facility in July with Needham, Mass.-based Salus Capital Partners and White Plains, N.Y.-based Downtown Capital Partners to refinance debt.
The former makes “secured, asset-based loans,” and the latter “invests in and lends to stressed and distressed companies,” according to the firms’ respective websites.
