Bombay's board said it was "encouraged" by the offers. Substantial due diligence lies ahead, and there's no assurance the offers would lead to a transaction. At the same time, the board said it had obtained a new $10-million secured term loan facility from a fund managed by GB Merchant Partners LLC. It joins an existing $125-million secured credit facility and improves liquidity, the company said.

For the 13 weeks ended May 5, the locally based home furnishings chain's total revenue was $104.6 million, down 11.9% from $118.7 million in the opening quarter of 2006. Same-store sales declined 10.2% during first-quarter 2007, and revenue from stores dropped to $95.6 million, versus $107.2 million in the prior-year quarter.

The retail decline comes from both the same-store sales drop and a lower store count now compared with the store count in first-quarter 2006. During first quarter it closed 24 units and opened two, taking the total to 419.

Direct-to consumer sales via the internet and mail order reached $8.5 million, up from $6.6 million, due primarily to increased online sales. In the past month Bombay launched in-store pick-up for online customers, a service designed to improve its growing internet business.

"The offering is tracking well and has experienced significant growth," said David Stewart, CEO, during a conference call. "We believe our internet strategy continues to present an excellent opportunity to leverage our expense base into meaningful profitable growth."

He acknowledged disappointment in the quarterly results, "which continue to be affected by softness in the retail home sector," he said. "We remain focused on our continued effort to return Bombay to positive cash flow and long-term growth," Stewart concluded.