Garamet's link is from December 5, 2017. In her link it says, "Under the revised bonus plan, Toys R Us must achieve adjusted earnings of at least $484 million before any bonuses are paid, and reach $550 million to trigger the full $14 million payout. If adjusted earnings for fiscal 2017 exceed $550 million, those bonuses could be greater than $14 million, but attorneys for Toys R Us said it was extremely unlikely that the company would exceed the $550 million goal." At the time of the article they were still trying to save the company. But as of a Jan 24 (updated Jan 29) article: "The bankrupt Toys R Us chain is not releasing its holiday sales results, for the first time in at least a dozen years, abandoning a longstanding tradition of letting the business world know how it fared during the two most crucial months of the year." https://www.northjersey.com/story/m...les-numbers-prepares-close-stores/1062831001/ Clearly if they had met the goals they'd be bragging. They didn't meet the goals. They got no bonus money. As of now though since the company as of Wednesday has told everyone that it's over and everyone's going to be out of a job it's definitely clear that Toys R' Us did not meet the goals and the bonus money wasn't paid out. Toys R Us is done. All stores will be closing.
so no one is talking about how Bain Capital (Mitt's outfit) saddled them with unsustainable debt which led to this? Toys-r-Us still has(had) 20% of the domestic toy market, but the debt load was unsustainable. Unrestrained capitalism wins again! (33,000 out of a job)
Amazon will soon be a monopoly. Amazon and local small time businesses. Not a good thing I wouldn't know anything about that. One thing is for sure though - debt is underwritten by both parties. Also it's not in the creditor's interest when the debtor goes tits up.
Except, it isn't in this case or in the case of most leveraged buy outs. The hostile take over target usually gets 100% of the debt for the purchase/take over, the company like Bain asset strips to make an immediate profit, and then they seek to "cut costs" or "streamline operations" before flipping the company or taking it public again. In virtually all cases this results in the target company being worse off while the corporate raider takes no debt and makes a profit on the asset striping.
Not how it works. For example, Borders Books filed for Chapter 11 bankruptcy in 2011. As part of the filing, they submitted a plan to return the company to profitability, this plan was rejected by their creditors, who thought that by selling off the meager assets of Borders, they could make more money, than if Borders stayed in business. Even in a worst-case scenario, where Borders kept running for a few more months before going tits up, the creditors would have been better off, but because they wanted their money now, rather than later, Borders had to die. (Oh, and yes, I know that there are bookstores outside the US which carry the Borders name, they are not owned by the same company. As part of the deal with killing off Borders, they were forced to sell-off the name for use in foreign markets.)
I liked borders around 1992. A great chain with a great location and comfy seats to read the latest magazines without paying for them. I did buy a few CDs and books from them back in the day but by the late 90's I discovered file sharing and so stopped that nonsense. I think some of the last CDs I bought was around the year 2000 when I was in Kosovo and I was buying bootleg CDs made by the Bulgarian mafia for $1 each. True story, folks.
Amazon is monopolizing the admin, but most toys I buy from them are still coming from third-party sellers (a pain since I can't use collection points or lockers). That said, it is pretty much exclusively Transformers stuff so might be biased.
It is another win for capitalism. An uncompetitive business will be dissolved and its capital redeployed for more profitable ventures.
Except it was and still would be very competitive if we didn't allow the types of hostile take overs which load the victim up with debt. If companies want to do hostile take overs, fine, but their own firm and not the victim should be stuck with the debt load.
Yes, it sucks to be unemployed. But people working in an uncompetitive or unprofitable business would be of more benefit to society working to produce things of higher value. If employment comes before usefulness and productivity, we could just pay the displaced workers to dig holes and fill them back in. Having them work in an unprofitable venture amounts to the same thing: a net consumption of resources with no net increase in value provided.
Except that in this case, it appears that Toys R Us would have been just fine, had it not been for the shenanigans of Bain Capital. Not to mention you're assuming that these people will go on to jobs which pay equivalent wages to what they were making (and we won't even get into the issue of what their benefits might be like). While that might be the case for some workers, others, especially those over-40, will have a tough time making what they once were. Additionally, the cities will have to figure out what to do with the now empty buildings. Retail space isn't exactly a hot seller these days, and even some places are having trouble finding tenants for warehouse space. Not to mention, as happened when Borders went tits up, the city where their largest distribution center was located, found that all their gifts to the company were for naught. Large numbers of unemployed people quickly become a threat to national stability, however. As more and more jobs are lost to automation we're going to have to make some very hard choices in how we handle the growing ranks of unemployed people.
Arguable, but Toys R Us wasn't in great shape when Bain et al staged a leveraged buyout. I am not making the assumption that the workers will be better off. In fact, they'll likely be worse off since, if they had better opportunities, they would've already taken them. If the buildings are not needed, they can be razed and the land repurposed. Not every plan pays off in the end. The cities got the benefit of tax revenue and employment while it lasted, though. Probably, but that day has not yet come.
You have to follow the Twitter thread, but it turns out that Toys 'R Us went bankrupt because of abortion.