Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
Yeah?
Isn’t that the entire thing that private equity firms do? Buy up companies, sell all their assets to the private equity firm, then have them lease it all back for insane amount until it’s bankrupt.
Makes a whole lot of short term profits, destroys the company and it’s employees. No fucks given
Private equity firms are a cancer (amongst many cancers) on humanity
Looks like EA is next on the chopping block.
Glad I stopped caring about the game industry.
Now it’s just fun to laugh and point the finger at all the morons/losers getting taken advantage of for being stupid.
They killed Karstadt this way, V&D, and I bet a bunch of other department stores too.
It wasn’t always this bad. It started out as a way to improve local businesses. The problem is the internet and all the hype
Ummm private equity firms have been evilly destroying companies since the early eighties at least.
This was back in the 70’s
I hate to tell you this but private equity has been a problem long before the Internet went mainstream. I think venture capital firms we’re a product of a post-WWII world trying to capture as much wealth as possible during reconstruction. I’d have to check some sources to be sure of that and I’m really not motivated enough to do it.
For a while they brought down prices and improved service
It only was like that for a short time though
Don’t see how the internet plays a role in firms purchasing stuff then gutting them for profit.
Local business owners are better at their jobs since they have a tremendous amount of resources at their disposal