The Cause and Consequences of the Retail Apocalypse | New Republic


24 bookmarks. First posted by nowthis 3 days ago.


RT : capitalism in action baby
from twitter
8 hours ago by grantpotter
Private equity firms overburdened businesses with debt, and now workers are paying the price. Will policymakers do anything about it?
politics  economics  retail  finance  Management 
yesterday by jorgebarba
Private equity firms purchased numerous chain retailers over the past decade, loading them up with unsustainable debt payments as part of a disastrous business strategy.

Billions of dollars of this debt comes due in the next few years. “If today is considered a retail apocalypse,” Bloomberg reported, “then what’s coming next could truly be scary.” Eight million American retail workers could see their careers evaporate, not due to technological disruption but a predatory financial scheme. The masters of the universe who devised it, meanwhile, will likely walk away enriched, and policymakers must reckon with how they enabled the carnage.

[...]

This is a robbery in progress. Private equity firms borrow massively to buy companies, and use corporate cash reserves to pay themselves back. Workers who supply the value to the business see nothing; in fact, to service the debt, companies usually cut staff. When the retailer collapses under the borrowing weight, all workers lose their jobs. And even when sales go up, like they have by 5 percent annually in the toy sector over the past five years, dominant toy sellers like Toys“R”Us cannot compete because of the debt burden. The company’s profitability was increasing when it filed for bankruptcy.

Private equity firms counter that their business model returns companies to fiscal health through superior management. But the retail apocalypse reflects an epic miscalculation. Typically retail firms roll over debt to buy time, but interest rates have risen since the last set of buyouts several years ago, making that prospect more expensive. The overleveraged companies are finding it hard for anyone to agree to refinance.
late_stage_capitalism  consumerism  investor_capitalism  private_equity  economics  retail 
yesterday by perich
RT : Private equity firms—not Amazon—are killing America's brick and mortar retail businesses.
from twitter
2 days ago by sjenkins
The mismanagement of Sears reflects an ongoing pattern: private equity takeover artists that benefit from hobbling the companies they purchase.
econ 
2 days ago by rubbercat
The Macy’s near my house is closing early next year. The mall where it’s located has seen less and less foot traffic over the years, and losing its anchor store could set off a chain reaction. via Pocket
pocket  digg  trending 
3 days ago by jburkunk
The Macy’s near my house is closing early next year. The mall where it’s located has seen less and less foot traffic over the years, and losing its anchor store could set off a chain reaction. via Pocket
IFTTT  Pocket  digg 
3 days ago by cthorpe
The Macy’s near my house is closing early next year. The mall where it’s located has seen less and less foot traffic over the years, and losing its anchor store could set off a chain reaction. via Pocket
IFTTT  Pocket  digg 
3 days ago by michaelkpate
The Macy’s near my house is closing early next year. The mall where it’s located has seen less and less foot traffic over the years, and losing its anchor store could set off a chain reaction.
Archive  digg  ifttt 
3 days ago by Goldmanjordan
The Cause and Consequences of the Retail Apocalypse via Instapaper http://ift.tt/2yAxtqX
IFTTT  Instapaper 
3 days ago by craniac
The Macy’s near my house is closing early next year. The mall where it’s located has seen less and less foot traffic over the years, and losing its anchor store could set off a chain reaction. via Pocket
IFTTT  Pocket  instapaper 
3 days ago by drewcaldwell
RT : capitalism in action baby
from twitter
3 days ago by jeffbyrnes
Private equity firms overburdened businesses with debt, and now workers are paying the price. Will policymakers do anything about it?
economics  politics  debt 
3 days ago by mookieproof
Up on how private equity accelerated the retail apocalypse with its predatory asset-stripping schemes
from twitter_favs
3 days ago by nowthis