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Hooray! (Not only because they are owned by Bain Capital). Hope most of the employees land OK.
by guscost 6y ago
Hooray! (Not only because they are owned by Bain Capital).
Hope most of the employees land OK.
- airstrike 6y agoBain Capital and retail seems to make for a toxic cocktail
- ghaff 6y agoNot that private equity doesn't have its problems, but usually by the time PE is involved, things were already on a pretty serious downward trajectory.
- digitaltrees 6y agoNot really. PE takes good businesses, strips the assets, loads up debt and issues a dividend. Then shockingly files for bankruptcy.
- missedthecue 6y agoThis is popular to say, but doesn't hold up to reality. An analysis of "17,171 worldwide leveraged buyout transactions that include every transaction with a financial sponsor in the CapitalIQ database announced over a 40 year period" found bankruptcy rates around 6% [1]. This isn't notably out of the ordinary. Large deals get press. They also have a habit of involving over-extension. As a result, the average private equity story is about things going spectacularly wrong at scale. [1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.121 https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.121 Table 2
- airstrike 6y agoI'd like to run the numbers on just the Bain Capital retail acquisitions...
- deleted 6y ago[deleted]
- gamblor956 6y agoNo, Bain has a unique history of acquiring companies that are doing fine pre-acquisition which struggle post-acquisition because they are saddled with acquisition-financing debt placed on them by Bain and thus cannot afford to invest in product development, renovating stores, or other necessary business expenses. Worse, Bain takes the money that would have been used on corporate reinvestment in the absence of an acquisition, and which should be used to pay down the acquisition debt arising from the acquisition, and uses it to pay themselves hundreds of millions in "management fees" despite not actually managing anything. Also, PR to congratulate themselves for the wonderful job they've done "cutting expenses," meaning the tens of thousands of jobs that were cut so that Bain could get paid. Bain is parasite. They've always been a parasite, to the point that they even found ways to turn their few successes (like Staples) into failures.
- mark-r 6y agoThis is a chapter 11 bankruptcy, which usually brings about debt restructuring and some store closings. I would hope most of the stores will remain and the employees will continue as if nothing happened.
- tssva 6y agoAccording to the article they reached debt restructuring and recapitalization deals with their lenders before even filing. The bankruptcy proceedings should be short and they should come out mostly intact.