TIL that Toys R Us wasn't killed by competition, but by private equity companies
TIL that Toys R Us wasn't killed by competition, but by private equity companies
inthesetimes.com How Private Equity Killed Toys “R” Us
Private equity firms bled the company dry to turn a profit, and now mass layoffs are imminent.
Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.