Linens 'N Things returns to Home Outfitters stores

* Branded goods to be sold in 69 stores in Canada

* Deal extends through 2016

By Emily Chasan

NEW YORK, Oct 8 (Reuters) - Linens 'N Things branded goods are headed back to store shelves for the first time since the home goods retailer was forced to shut its doors last year, the owners of its brand said on Thursday.

In a new licensing deal, Home Outfitters, a division of Hudson's Bay Co [HUBAY.UL], will sell a special line of Linens 'N Things branded goods at its 69 stores in Canada beginning next spring. The deal extends through 2016.

Linens 'N Things, once the No. 2 U.S. home goods retailer after Bed Bath & Beyond (BBBY.O), shut its doors last year after it failed to find a buyer in bankruptcy.

At a bankruptcy auction in January, Gordon Brothers Brands and Hilco Consumer Capital won the rights to the Linens 'n Things intellectual property.

Since then, Linens 'N Things branded goods have been sold on a website. The new licensing deal is the first time the brand will head back to brick-and-mortar stores since the bankruptcy.

Gordon Brothers and Hilco, who also own brand rights to former electronics retailer The Sharper Image and former furniture seller Bombay Co, said they expect the licensing deal to generate more than $100 million in retail sales over the life of the deal. (Reporting by Emily Chasan; editing by John Wallace)