Scott Gladstone didn’t manage to hold on to Anna’s Linens Inc.’s name, according to documents filed with the U.S. Bankruptcy Court for the Central District of California in Santa Ana.
Gladstone, whose father Alan founded the Costa Mesa-based household-goods company in 1987, was part of the group outbid by Michael Fallas during an auction held Sept. 17 at the Los Angeles office of the retailer’s attorney.
Fallas is president and chief executive of Gardena-based National Stores Inc., which sells discounted apparel, school uniforms, home goods and toys, and gets about $900 million in annual sales.
He acquired the rights to Anna’s Linens’ intellectual property rights for $235,000 under affiliate I & K Vending LLC. The buy includes the Anna’s Linens name, trademarks, copyrights, domain names and customer lists.
The next highest offer for Anna’s Linens’ intellectual property came from Florence, N.J.-based Burlington Stores Inc., which put up $230,000 but was considered as a backup bid in the end. Sensio Inc. in Montreal, Canada, bid only on the bankrupt retailer’s Bella line of table linens, which it acquired for $40,000.
Fallas had earlier taken over leases for 41 of Anna’s Linens stores for $1.46 million in an auction held Aug. 27. The deal with FP Stores Inc.—a National Stores subsidiary that’s better known as Fallas Paredes—included one Orange County location, at 2120 S. Bristol St. in Santa Ana. Another 10 are in Los Angeles County, and the rest are spread throughout the nation—Texas, Florida, Nevada and North Carolina, among others.
1,200 Jobs
Fallas told the court his chain plans to hire many of the 1,200 people who were terminated after the end of liquidation sales at the stores his company acquired.
Anna’s Linens filed for Chapter 11 bankruptcy protection on June 14 after defaulting on an $80 million line of credit from Salus Capital Partners LLC of Needham Heights, Mass. It had more than 2,331 employees and 252 stores 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 to manage liquidation of all of its merchandise, store furniture, fixtures and equipment, which has since been completed. It also retained Hilco Streambank, officially known as Hilco IP Services LLC, in Dedham, Mass., to coordinate the marketing and sale of its intellectual property. New York-based RCS Real Estate Advisors was marketing store subleasing opportunities and managed to get Rockaway, N.J.-based Party City Corp. into 13. The deal for Halloween pop-up shops, effective Sept. 1 to Nov. 22, could bring $250,000.
The younger Gladstone, who became chief executive of Anna’s Linens in 2014, was part of the insider group that was looking to “retain Anna’s name and operate over 100 stores,” Chief Financial Officer J.E. Rick Bunka said during a creditors hearing on Aug. 7.
The retailer last week asked the court to allow it to walk away from its corporate office lease on 3560 Hyland Ave. It was paying about $65,000 per month to Costa Mesa-based C.J. Segerstrom & Sons.
The lease was set to expire on Aug. 31, 2019.
