We have had our "new" bathroom for almost a year now, and I decided it was time for a towel purge. I believe you need to have three sets of towels for each person. One that is in rotation, one set for what's in the wash, then a contingency set if you missed a week of laundry. We also need a set to have on hand for a visiting family of four. Keeping that in mind, I culled the old/embarrassing towels from our linen cupboard. I had a sufficient enough surplus from our old bathroom to put together a guest set.
The guest set are beige and what we used when our bathroom was white. We won't be using them in our new design, so it make sense to set them aside for visitors. In addition to keeping towels in the cupboard, I also stowed the extra sheets and blankets we need to make up guest "beds." By "beds" I mean a twin sized air mattress as well as two long cushions from a couch that is long gone. We do now also have the futon in the basement.
My main goal was to deal with the over-stuffed cupboard, which is a retired china cabinet missing glass (the opening is covered with cloth). It was so stuffed you couldn't easily dig out what you needed. Now it is much easier to get to what we need, and it holds only what we need.
I picked up two bath towels and a hand towel on clearance at Big Lots yesterday and that was the impetus for me to deal with the closet. The truth is TBG has been unhappy about it for months. My procrastination was that there were still perfectly good towels in the old color that I wasn't ready to part with. Now I have a use for them and the extra "not so nice" towels will be used for the dog or to clean up/dry messy stuff. IMO, the only thing worse than throwing in the towel, is throwing out the towel!