Crazy about retail.
http://www.retailwatchers.com/
I'm guessing it will play out similar to Toys R Us. Very sad. Both had potential if they adjusted to changing times and were run correctly.storewanderer wrote: ↑March 24th, 2018, 7:56 pm
I wonder what will happen with a certain large grocery chain that private equity has also put into significant debt, long term.
A lot of Albertsons' debt (that is who what we're talking about, right?) was assumed between buying Safeway and New Albertsons. And even if it does end up buying Rite Aid, at least that debt is actually added to a chain that is growing. This isn't a defense of Albertsons' debt but the circumstances are very different from Toys R Us (or Winn-Dixie). A lot of Winn-Dixie's problems on the other hand was never following up on "bold, new prototypes" and then just doing cheap remodels. If they had stuck to their guns with the first big new prototype (the late 2000s one with the "freshly ________" inside, as well as continuing to pull out markets and close stores that weren't working, then maybe, maybe even after merging with BI-LO, they might have gotten the chain sold to someone like Kroger. Back on Toys R Us, I don't think it was solely private equity investors' fault that Toys R Us died. Like buying FAO Schwarz, Toys R Us Express, and likely others that just eroded the chain.storewanderer wrote: ↑March 24th, 2018, 7:56 pmI wonder what will happen with a certain large grocery chain that private equity has also put into significant debt, long term. We see how a smaller scale of a similar situation is ending for Winn Dixie...babs wrote: ↑March 24th, 2018, 3:46 pm When private equity leaves you $7 billion in debt with $500 million in annual payments, that's not much left to pay extra store staff and upgrade the shopping experience. Blame Mitt Romney and his business buddys, not the poor retail managers trying to figure out how to run a store with their hands tied behind their backs.
Toys R Us is a different model than a grocery store, for sure. While grocery stores are exceptionally good at generating a lot of cash flow all the time, Toys R Us is a business that generated pretty poor cash flow during large periods of time during the year.pseudo3d wrote: ↑March 24th, 2018, 9:06 pmA lot of Albertsons' debt (that is who what we're talking about, right?) was assumed between buying Safeway and New Albertsons. And even if it does end up buying Rite Aid, at least that debt is actually added to a chain that is growing. This isn't a defense of Albertsons' debt but the circumstances are very different from Toys R Us (or Winn-Dixie). A lot of Winn-Dixie's problems on the other hand was never following up on "bold, new prototypes" and then just doing cheap remodels. If they had stuck to their guns with the first big new prototype (the late 2000s one with the "freshly ________" inside, as well as continuing to pull out markets and close stores that weren't working, then maybe, maybe even after merging with BI-LO, they might have gotten the chain sold to someone like Kroger. Back on Toys R Us, I don't think it was solely private equity investors' fault that Toys R Us died. Like buying FAO Schwarz, Toys R Us Express, and likely others that just eroded the chain.storewanderer wrote: ↑March 24th, 2018, 7:56 pmI wonder what will happen with a certain large grocery chain that private equity has also put into significant debt, long term. We see how a smaller scale of a similar situation is ending for Winn Dixie...babs wrote: ↑March 24th, 2018, 3:46 pm When private equity leaves you $7 billion in debt with $500 million in annual payments, that's not much left to pay extra store staff and upgrade the shopping experience. Blame Mitt Romney and his business buddys, not the poor retail managers trying to figure out how to run a store with their hands tied behind their backs.
Very interesting read. I believe this has a number of similarities for the situation for a number of other retailers especially those that have been involved with private equity.