Vornado and Bain sink Toys R US

[Winehole23]

Much of Toys R Us’s troubles, employees say, date to a 2005 leveraged buyout in which its new owners — private-equity firms Kohlberg Kravis Roberts and Bain Capital, and real estate firm Vornado Realty Trust — loaded the company with more than $5 billion in debt. The company filed for bankruptcy last year, citing $7.9 billion in debt against $6.6 billion in assets, and announced in March that it would close all 800 of its U.S. stores.https://www.washingtonpost.com/news/business/wp/2018/06/01/how-can-they-walk-away-with-millions-and-leave-workers-with-zero-toys-r-us-workers-say-they-deserve-severance/?utm_term=.92feb4e9f005

[Winehole23]

Last year, Toys R Us awarded executives $8 million in bonuses a week before filing for bankruptcy

[Winehole23]

Toys R Us is one of dozens of retailers backed by private equity to file for bankruptcy since last year, as heavy debt loads and increased competition take their toll on the industry. Others that have filed for bankruptcy following leveraged buyouts include Nine West, Claire’s, Gymboree, True Religion and Payless Shoe Source.

[Winehole23]

The retailer also paid $470 million in advisory fees, interest and other payments to Bain Capital, KKR and Vornado since 2005. The firms did not respond to requests for comment.

[boutons_deux]

Classic predatory, destructive p/e strategy by Capital:

LBO, pocket $Ms in fees, leave the victim company in debt that it cannot pay, maybe "asset stripping", finally bankruptcy.

... move on to next victim.

[clambake]

loaded it with debt that was never intended to pay off.

solid dumping ground.