- We really need a ban on leveraged buyouts where the leverage becomes the responsibility of the purchased entity. You shouldn't be able to borrow money to buy a company, then transfer the debt used to buy the company on to the company itself. Any theoretical arguments about why this is OK or a good idea should fall silent against the repeated observations of what happens in practice and the observable incentive structure created.
- Our Best Buy is great. Usually pretty good stock and good variety. People there seem to be pretty nice as well. Bought a laptop there a few weeks ago. The one I wanted was in stock, they had a good price and gave me a fair trade in for my old one. Wife loves the place too as she can try on all their phone cases before she buys. It’s great to have a local option so that is one of the reasons I also choose to support them.
by impossiblefork
0 subcomment
- I've been thinking that having competitive markets may require banning this kind of thing.
It's important that firms are not led in a way that prevents them from competing on price, and that may require limiting how they may take on debt.
- Here’s the part I don’t understand. If they can’t exit, don’t they lose money in spite of the limited downside risk? For example, the Toys “R” Us example:
"$1.3 billion came from the buyers’ own pockets”
"PE consortium collected $470 million in fees and interest over the course of ownership”
So they lost $830M on the deal?
by megaman821
1 subcomments
- Surely there is more to the story. Why would big banks lend in these situations if they always end in bankruptcy?
- > The list of PE-owned retail chains that have filed for bankruptcy or liquidated includes Toys “R” Us, Payless ShoeSource, Sports Authority, Gymboree, rue21, The Limited, Barneys New York, and many others.
Once again, you can't lump all PE groups into one all cohorts. All of these companies were bought out by Large-cap PE which is notoriously predatory. They may have an overwhelming amount of the drypowder, but in terms of absolutely number of PE groups, there are far more operating in the middle and lower middle market who don't do this.
by blindriver
0 subcomment
- > Amazon is very good at bits but has repeatedly failed at atoms.
This idea of bits vs atoms was stolen straight from the CEO of Uber, Travis Kalanick. During the infamous Silicon-Valley-TV-Show-esque Las Vegas company offsite, one of his big talks was about how Uber had to not only deal with bits, ie. the virtual world, but also atoms, ie. the real world. That made it a bigger challenge than all the other companies like Google, Facebook, etc where they could dictate their own rules since they controlled everything, but Uber didn't have that luxury.
by rideontime
2 subcomments
- TLDR: One chain was gutted by private equity vultures, the other wasn't. Don't need an AI-generated slop article to tell me that.
by phendrenad2
2 subcomments
- Best Buy isn't long for this world. You can tell from their mobile app, which is extremely slow and has terrible UX. It's a bloated store coasting off of its former success and it's going to slowly suffer the same fate as Fry's if they don't get smart. Best Buy has a few things propping it up right now: PC repair services, home installation, quick availability of replacement items (SSD dies? Get one right now, rather than waiting 3+ days for Amazon), and in-store demos (sound systems and the like). None of these constitute a moat, and these four spaces are already full of competition. Everything else is just warehousing for the eventual liquidation. They should realize that their brand has become a luxury, and they should start acting more like the Apple store, selling fewer items and trying to develop their own brand more.
But really, the app is terrible. And an app is table stakes these days. It's just remarkable how bad it is.
- But Best Buy is a shadow of its former self. I've stopped bothering to go there at all because they never have what I need. Even when I was shopping for a tablet.
by MarkusWandel
2 subcomments
- Fabrics? I'm old enough to remember my mom making clothes from scratch, because buying fabric by the yard and sewing from patterns was cheaper than buying ready made clothes. That no longer being the case, how many people less than 50 years old do you know that can even operate a sewing machine? Totally different product category than tech gadgets.
by nonford150
1 subcomments
- Joanns died b/c of two things - they stocked items no one really wanted, and they doubled down on that by opening way too many stores.
With a focus on fabric and yarn, they would still be here - maybe. Handcock Fabrics went the same way and they died. Hopefully, someone will take a clue and start a new focused venture. Buying fabric over the web is horrendous.
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