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How vulture capitalists ate Toys 'R' Us

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Re: How vulture capitalists ate Toys 'R' Us

#151

Post by kelleoeo »

jerf wrote: post #25
kelleoeo wrote: post #16

Earlier quoted context omitted.

Rich people losing a fraction of their wealth and who will rebound thanks to business networking effects, and be given a pass because sometimes that’s how it goes Limited downside seems accurate

OK, what are you looking for? Rich people get one shot at doing something, and if they fail, the government comes riding in and takes all their stuff? You have to be careful when you get vindictive at rich people; they're also the employers, and it's hard to build a system where such people aren't "the rich". (If you hard-core leveled everyone in the world to equal wealth, nobody would be able to employ anybody else…

I want you and everyone else to stop kowtowing to blatant nonsense and “daddy”.

Physics and economics are not one and the same.

Ownership is not divine and should be treated as such.

Paulo Freire and others are better at explaining the reality.

This forum is a wasteland of neoliberal babies who want to build a giant castle to their egos and live in it.

Grow up a bit. Be less ignorant of history and stop fetishizing economic output.

If we have to motivate the species so hard to produce, perhaps economy is inherent to our biology.

But next quarter growth or bust!

Clueless rubes

Re: How vulture capitalists ate Toys 'R' Us

#152

Post by panda888888 »

Are you guys not familiar with the "Barbarians at the Gate" story of what happened with KKR & RJR Nabisco in the late 80s?

I highly recommend you watch the movie or read the book if you don't know about it. The movie is excellent.

Knowing that sequence of events, I feel like people should have realized that all of this would happen to Toys R Us.

Re: How vulture capitalists ate Toys 'R' Us

#153

Post by kelleoeo »

jerf wrote: post #82
chongli wrote: post #35

Earlier quoted context omitted.

OK, what are you looking for? Rich people get one shot at doing something, and if they fail, the government comes riding in and takes all their stuff? I can't speak for the person you replied to, but how about this? Less downside for the workers. We're talking about thousands of people losing their jobs. These people then go into a smaller labour market where they compete with other vulnerable retail workers, affecti…

"We're talking about thousands of people losing their jobs. These people then go into a smaller labour market where they compete with other vulnerable retail workers, affecting far more people." Expand your time horizon a bit. Having freed up the malinvested resources, other enterprises will arise which will hire them, at jobs that are now almost by definition more solid than the one they left behind, since the one t…

Employed to what end is a question you seem to not be asking at all

Continue piling onto the stash already very wealthy people have is primarily all this economic activity is accomplishing now as they crater retirements, cut healthcare or inflate prices out of the reach of the majority (which globally ~80% lives on ~2.50/day.)

What’s the point of 40-50+ hrs a week for me now if some whithered old geezer can change a law and flush the effort down the drain

How about meet basic utilitarian needs of food and healthcare, common ones of all humans, in the domain of the government

And what we spend on time on otherwise is up to us. Let’s all punch a clock to make earrings and baubles to support the ephemeral economy? Why does one need to be compelled to make consumer garbage? Oh cause stock prices or we can’t anger a small portion of the population: rich people

They have no divine right to wealth you know?

It’s self eating shitshow of stupid ideas that reinforce stupid ideas.

Steve Jobs is right: none of the rich are any smarter or more capable than your avg college grad. They just got lucky sooner

Re: How vulture capitalists ate Toys 'R' Us

#154

Post by kelleoeo »

airstrike wrote: post #144
smcl wrote: post #77

Earlier quoted context omitted.

It probably feels very good to type a comment like that while imagining some invisible force gently guiding these newly unemployed people to their new careers. However in reality thousands of people have now lost their income and likely their health insurance, and will have to compete in what in many places is a pretty brutal and not at all healthy job market. It sucks, and there’s nothing you or I can do about it ..…

Economics isn't something you can just fabricate an opinion on. There are countless academics who have actually studied the labor market who would correct you if you would spend any time trying to learn rather than pontificate. This isn't subjective.

Actually economics are exactly that

Capitalism have built assumptions to its origins that protect capital holder: divine right was often used in the era of its origin

The US Constitution considered landowners above others due to them contemporary belief of divine rights

Our contemporary system is built upon historical record

There’s historical record that plainly shows humans deciding to write a law this way because it favors company X or ideology Y

There’s plain historical record that shows obstructionism to social evolution in favor of entrenched players

And scholars and academics measure THOSE results

So your argument is based upon built in bullshit

Economists have been PAID to peddle bullshit, corrupting their facts

My god I can’t even. Is this really what they teach in college now? Economics and physics are one and the same despite a ... there are decades of government documents detailing their collusion and manipulation of invention and investment for the benefit of power players

But yeah our contemporary economy is a greenfield implementation lol

Re: How vulture capitalists ate Toys 'R' Us

#155

Post by smcl »

airstrike wrote: post #144
smcl wrote: post #77

Earlier quoted context omitted.

It probably feels very good to type a comment like that while imagining some invisible force gently guiding these newly unemployed people to their new careers. However in reality thousands of people have now lost their income and likely their health insurance, and will have to compete in what in many places is a pretty brutal and not at all healthy job market. It sucks, and there’s nothing you or I can do about it ..…

Economics isn't something you can just fabricate an opinion on. There are countless academics who have actually studied the labor market who would correct you if you would spend any time trying to learn rather than pontificate. This isn't subjective.

I know many economists would disagree with me - they're the same who would also be OK with the decline of industry in places like the north of England and the Rust Belt and would point to the overall raise in the GDP per capita and the rise of the service sector and say that this roughly cancels this out. However they can afford to treat the country like a big "system" and can ignore the plight of the individuals who have been left behind in this system and the communities where they live.

The main thing is that just I hate that otherwise smart people find it so easy to "other" a big group of people and find ways to back their belief that ultimately this groups suffering is just and good. It's not. As I said, maybe we can't do anything about it ... but the least we can do is not be so fucking smug about it.

Rant over.

Re: How vulture capitalists ate Toys 'R' Us

#156

Post by sangnoir »

JumpCrisscross wrote: post #112
poof131 wrote: post #96

Earlier quoted context omitted.

Why do I doubt they are the real losers here? Bloomberg states that they pocketed over $470M in fees.[1] And I imagine they were able to write off losses against wins elsewhere. So the real losers still seem to be the employees and the American people. A few years back I was talking to an east coast banker turned VC and he was pooping on the leveraged buyout industry. He said that all the debt payments are tax deduct…

> Bloomberg states that they pocketed over $470M in fees They invested $1.3 billion. The interest payments were deductible to Toys 'R' Us, which would have been useful if it survived long enough to pay dividends to its equity holders. KKR et al lost money on this.

> KKR et al lost money on this

I think it's hard to say conclusively without being their tax accountants/lawyers:

> > all the debt payments are tax deductible

After declaration of bankruptcy, they probably get tax credits they can use in the coming years... Excuse my inexact terminology, I'm not an Accountant.

Re: How vulture capitalists ate Toys 'R' Us

#157

Post by stevenicr »

replicatorblog wrote: post #93
rayiner wrote: post #67

Earlier quoted context omitted.

Yeah, seriously, the author is nuts. I've got a 5-year old and I can't remember the last time I've been to Toys R Us. She knows how to pick stuff out on Amazon; for trinkets there's Target, and a lot of her "toys" now are on her iPad/digital. Suburban big-box retail stores aren't a growth area, and toy stores selling Chinese-made junk are probably among the worst situated. Unlike, e.g. clothes or food, there is littl…

This is an excellent point. I don't think I've read an account of the TRU fiasco from the POV of a person with kids. By my read, TRU's problem isn't debt or Amazon, but changing substitutes. E.g.: + YouTube + Amazon: Lets kids see what a toy looks like in HD, whereas previously you'd need to go to a store to see the big images on the box, or to press the "try me" buttons. As you said, the brand drives most of the sal…

Apps - yes. Addictive electronic entertainment has taken over. I imagine many other parents also have a few piles of toys that were cool / must have / licensed by the popular things, that just sit in that pile and take up space while phones / tablets / consoles other addictive electronics get used constantly.

Why waste money on things that get an initial "wow!" - only to be tossed into a pile and never used, when there are tons of privacy stealing ad supported free things that take all the time and attention.

Last holiday I looked through the TUS online and offline catalogues for 10-12 age range, found 2 things that may be interesting to the youngin' here; one was a watch.

Strangely card based games like pokemon yugio mtg can actually get groups of kids involved without the need for electronics, but I don't think those alone would keep a large warehouse in business. I am also not driving across town when target has the card packs a mile from here, and specialized card shops are all over town.

I did see TUS expand it's electronics section, but the ad supported freemium models don't sell many games, just hardware once every so often.

Sad to see TUS go, unlike GP commenter, I don't think the author is crazy, I believe that shareholders often influence places to make decisions that may raise profits in the short term yet lose the war after a couple of years. It may not be the only reason, but I'd wager it's one of the main ones out of the top 10 perhaps.

Re: How vulture capitalists ate Toys 'R' Us

#158

Post by Retric »

JumpCrisscross wrote: post #105
Retric wrote: post #80

Earlier quoted context omitted.

compared to leveraged borrowers is hardly a reasonable comparison as as toys r US did not fall into that category before the buyout.

Un-leveraged companies don't need to restructure; the comparison is apt for the question which is asked. In any case, your claim that most PE-backed companies fail is patently false.

I did not say most PE companies fail, just that 'often' aka one pattern for PE is to over leverage as a risk mitigation strategy. Every dollar they pull out is a dollar they keep independent of how much the company tanks.

As to over leveraged, the most attractive targets for PE is when the companies assets are worth more than their stock. That's the opposite of being highly leveraged. Remember, profit and assets are two very different things and a company can lose money while still having a lot of capital.

Re: How vulture capitalists ate Toys 'R' Us

#159

Post by jmalicki »

benmmurphy wrote: post #23
JumpCrisscross wrote: post #2

> if Bain, KKR, and Vornado had never come along, Toys 'R' Us wouldn't be doing stellar, but it probably could've muddled through I'm rarely a defender of leveraged buy-outs, but in this case, I think it was a good thing. Private investors took a moribund business and attempted a turnaround. If they succeeded, everybody would have won. If they failed, a long and tortured slide into irrelevance got aborted and cut sho…

do you know how creditors protect themselves from abusive owners generally? like if i was loaning a business a large amount of money like 80/20 in this case then i would be worried the owners might find a way to siphon the money i loaned them out of the business in a way that benefited them personally.

It's called "bankruptcy fraud" if you want to read up on the specifics...
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