5 ms·

Cirque du Soleil files for bankruptcy and cuts 3,500 jobs

36 points by doppp 6y ago

joubert 6y ago
Sad. Love the Cirque aesthetic.
tapatio 6y ago
RIP
deleted 6y ago
[deleted]
haram_masala 6y ago
This is truly sad. Cirque is one of those organizations that creates magic. Every single thing they do (on stage) has clearly been obsessed over, refined to perfection, and rehearsed beyond any possible doubt. Part of the joy of their shows is beholding a group of people who care that much about their work. On the other hand... later on in this article, it points out that Cirque du Soleil is $1 billion in debt. That probably didn't happen in the past three months. Perhaps Cirque is yet another swimmer who's being exposed when the tide goes out, as Hertz was.
- kalenx 6y ago
  Their debt comes from their acquisition. I'm not sure I understand how this is even possible, but it seems that hedge funds are able to buy entities (like Cirque du Soleil) and transfer the cost of acquisition as a debt for the acquiree -- and, of course, not be responsible for this debt.
  - himinlomax 6y ago
    https://en.wikipedia.org/wiki/Leveraged_buyout https://en.wikipedia.org/wiki/Leveraged_buyout
  - locopati 6y ago
    vampire capitalism https://www.shoutoutuk.org/2016/05/26/vampire-capitalism/ https://www.shoutoutuk.org/2016/05/26/vampire-capitalism/
  - xtracto 6y ago
    Same thing that happened to Toys R Us if I recall correctly. So sad.
    - smabie 6y ago
      I mean KKR and Bain took over Toys R Us in 2005 and it filed for bankruptcy in late 2017. At the time of the LBO in 2005, Toys R Us was already hurting and not in the best place. Though we can't know the path not taken, it's probable that Toys R Us would have shut down earlier, the LBO might have been its best chance of success. Based on the articles that I've read about the LBO, I think there is an argument to made that Toys R Us was mismanaged after the takeover: a gargantuan sum was spent every year to service the debt that was taken on after the LBO. People point out that because of this, Toys R Us was unable to make the capital investments to compete with Amazon and big-box stores. But it's not clear to me that TRU could even begin to compete, even if they had the money for capital investment. Most of TRU's business is holiday gifts, which is particularly sensitive to disruption by online retailers. No one is stopping into TRU at the last minute for same household staple, everytime someone needs a toy you know in advance (birthdays, holidays, etc). Because of this, how could they ever have competed with Amazon?
dehrmann 6y ago
The Bloomberg story is a lot better. It talks about some of the upcoming options, and it says Cirque will likely survive in a smaller form, so I doubt this is Chapter 7. https://www.bloomberg.com/news/articles/2020-06-29/cirque-du-soleil-files-for-bankruptcy-following-shutdowns https://www.bloomberg.com/news/articles/2020-06-29/cirque-du...
- ipnon 6y ago
  Bloomberg is consistently the best source of business and finance journalism, even over the Wall Street Journal.
  - smabie 6y ago
    Bloomberg is in the business of supplying news to people who actually really care about the details (traders, investors, etc), while WSJ is not. It's amazing how great Bloomberg is and how far they've expanded in recent years: tv, podcasts, longform, breaking news, etc. Like Google, this is all possible because of their obscenely profitable core product (the Terminal), though unlike Google, Bloomberg actually is in it for the long-haul.
LaundroMat 6y ago
There's also investigations ongoing into some of the people behind Cirque du Soleil, see e.g. https://circustalk.com/news/franco-dragone-prosecuted-for-fraud-and-money-laundering https://circustalk.com/news/franco-dragone-prosecuted-for-fr...
e15ctr0n 6y ago
Cirque du Soleil served as a case study for innovation[1][2] in the business book Blue Ocean Strategy (2004)[3]. [1] https://www.blueoceanstrategy.com/bos-moves/cirque-du-soleil/ https://www.blueoceanstrategy.com/bos-moves/cirque-du-soleil... [2] https://www.blueoceanstrategy.com/teaching-materials/cirque-du-soleil/ https://www.blueoceanstrategy.com/teaching-materials/cirque-... [3] https://en.wikipedia.org/wiki/Blue_Ocean_Strategy https://en.wikipedia.org/wiki/Blue_Ocean_Strategy

36 points by doppp 6y ago

joubert 6y ago

Sad. Love the Cirque aesthetic.

tapatio 6y ago

RIP

deleted 6y ago

[deleted]

haram_masala 6y ago

This is truly sad. Cirque is one of those organizations that creates magic. Every single thing they do (on stage) has clearly been obsessed over, refined to perfection, and rehearsed beyond any possible doubt. Part of the joy of their shows is beholding a group of people who care that much about their work. On the other hand... later on in this article, it points out that Cirque du Soleil is $1 billion in debt. That probably didn't happen in the past three months. Perhaps Cirque is yet another swimmer who's being exposed when the tide goes out, as Hertz was.

kalenx 6y ago
Their debt comes from their acquisition. I'm not sure I understand how this is even possible, but it seems that hedge funds are able to buy entities (like Cirque du Soleil) and transfer the cost of acquisition as a debt for the acquiree -- and, of course, not be responsible for this debt.
- himinlomax 6y ago
  https://en.wikipedia.org/wiki/Leveraged_buyout https://en.wikipedia.org/wiki/Leveraged_buyout
- locopati 6y ago
  vampire capitalism https://www.shoutoutuk.org/2016/05/26/vampire-capitalism/ https://www.shoutoutuk.org/2016/05/26/vampire-capitalism/
- xtracto 6y ago
  Same thing that happened to Toys R Us if I recall correctly. So sad.
  - smabie 6y ago
    I mean KKR and Bain took over Toys R Us in 2005 and it filed for bankruptcy in late 2017. At the time of the LBO in 2005, Toys R Us was already hurting and not in the best place. Though we can't know the path not taken, it's probable that Toys R Us would have shut down earlier, the LBO might have been its best chance of success. Based on the articles that I've read about the LBO, I think there is an argument to made that Toys R Us was mismanaged after the takeover: a gargantuan sum was spent every year to service the debt that was taken on after the LBO. People point out that because of this, Toys R Us was unable to make the capital investments to compete with Amazon and big-box stores. But it's not clear to me that TRU could even begin to compete, even if they had the money for capital investment. Most of TRU's business is holiday gifts, which is particularly sensitive to disruption by online retailers. No one is stopping into TRU at the last minute for same household staple, everytime someone needs a toy you know in advance (birthdays, holidays, etc). Because of this, how could they ever have competed with Amazon?

dehrmann 6y ago

The Bloomberg story is a lot better. It talks about some of the upcoming options, and it says Cirque will likely survive in a smaller form, so I doubt this is Chapter 7. https://www.bloomberg.com/news/articles/2020-06-29/cirque-du-soleil-files-for-bankruptcy-following-shutdowns https://www.bloomberg.com/news/articles/2020-06-29/cirque-du...

ipnon 6y ago
Bloomberg is consistently the best source of business and finance journalism, even over the Wall Street Journal.
- smabie 6y ago
  Bloomberg is in the business of supplying news to people who actually really care about the details (traders, investors, etc), while WSJ is not. It's amazing how great Bloomberg is and how far they've expanded in recent years: tv, podcasts, longform, breaking news, etc. Like Google, this is all possible because of their obscenely profitable core product (the Terminal), though unlike Google, Bloomberg actually is in it for the long-haul.

LaundroMat 6y ago

There's also investigations ongoing into some of the people behind Cirque du Soleil, see e.g. https://circustalk.com/news/franco-dragone-prosecuted-for-fraud-and-money-laundering https://circustalk.com/news/franco-dragone-prosecuted-for-fr...

e15ctr0n 6y ago

Cirque du Soleil served as a case study for innovation[1][2] in the business book Blue Ocean Strategy (2004)[3]. [1] https://www.blueoceanstrategy.com/bos-moves/cirque-du-soleil/ https://www.blueoceanstrategy.com/bos-moves/cirque-du-soleil... [2] https://www.blueoceanstrategy.com/teaching-materials/cirque-du-soleil/ https://www.blueoceanstrategy.com/teaching-materials/cirque-... [3] https://en.wikipedia.org/wiki/Blue_Ocean_Strategy https://en.wikipedia.org/wiki/Blue_Ocean_Strategy