The House2Home concept was originally launched in September 2000, as a way for the company, then known as HomeBase Inc., to avoid bankruptcy. HomeBase eventually closed 47 of its home improvement locations and converted the remaining 42 sites in Arizona, California and Nevada to House2Home home-decorating stores. The corporate name was changed to House2Home Inc. on Sept. 8, just days before the terrorist attacks that greatly contributed to the demise of the retail chain, according to company officials.

"The dramatic and sustained drop in sales that immediately followed the terrorist attacks put an extraordinary strain on cash flow, from which we could not recover," says Herbert Zarkin, House2Home's chairman and CEO. "Although this was a wrenching decision, our board of directors believes that, with no other viable strategic alternatives, a complete liquidation of operations is the only course of action available to us at this time."

All of House2Home's 4,700 employees will be laid off as a result of the store closings, although some workers will be retained during the liquidation process. The company has reached an agreement with its bank group, led by Fleet Retail Finance, which will allow it to retain a portion of the funds from the liquidation sales. Pending approval from the Bankruptcy Court, these proceeds will be used to pay employees, suppliers, vendors and other business partners.