FORMERLY PE OWNED
Toys R Us
Includes ToysRUs, Toys"R"Us
toys · Wayne, NJ
- PE Firm
- Bain Capital, KKR, Vornado →
- Year Acquired
- 2005
They put $5 billion in debt on a toy store, collected $470 million in fees, then liquidated it.
What Happened
- Bain, KKR, and Vornado bought Toys R Us in 2005 using 80% borrowed money — $5B+ in debt on a $6.6B deal, requiring $400M/year in interest
- The PE firms collected $470M in fees and interest while cash reserves shrank from $2.2B to $301M
- Spent $400M+ annually just servicing debt — money that could have funded e-commerce, store renovations, or competing with Amazon
- The PE firms walked away with $470M in profits while the company they owned was dying; when Congress demanded accountability, they offered $600 per displaced worker
The Damage Done
- All 735 U.S. stores liquidated in 2018 — an entire retail category for kids, erased
- 33,000 workers laid off with zero severance, despite longstanding company policy to provide it
- Store shelves were left bare in final years as the debt-strapped company cut back on inventory
- Parents lost the only dedicated toy store in most American cities — the remaining toy market is now dominated by Amazon and Walmart aisles