and other groups claims that almost 600,000 jobs have been destroyed in retail in the last 10 years by private equity-owned retailers. Together with jobs lost at related suppliers and other businesses, the report claims that almost 1.3 million jobs have been lost in retail as a result of private equity investments. Even my fellow Forbes contributors haveI don't see it that way.
The point at which a company bought by private equity is at the highest risk of failure is usually in the first two years after an acquisition. That’s when the debt level is usually highest. If the company experiences a downturn or a serious bump during that period, there’s a good chance it won’t be able to meet its debt obligations and find itself in serious jeopardy.
In 1998, Toys R Us was the largest retailer of toys in the US. In 1999, Walmart passed it by and has increased its lead steadily ever since. At the time of Toys R Us’ bankruptcy, Walmart sold almost 70% more toys than Toys R Us and Target is close behind. Online, Amazon is the champion in toy sales, far surpassing Toys R Us online sales.
The answer is more complex than the current wisdom would have you believe. Retail is going through a transformation. Changes in culture and technology have caused historically successful retailers to experience lower foot traffic, lower sales and lower profits. It’s not just highly-leveraged retailers that are suffering. It’s hard to name any major legacy retailer that has successfully adapted to the changes.
FUCK PRIVATE EQUITY
I asked several people complaining about the closing of the TRU/BRU store in our area. 'Did you support this store by shopping there? When was the last time you were there? 'Oh, we only went at Christmas.' 🤔
They don’t help...creating more and more debt upstairs.
Hahaha Amazon destroy this industry
Why not?