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🟡 FORMERLY PE OWNED
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/Vornado's 2005 LBO was 80% debt-financed — $5B+ in borrowed money 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
- •All 735 U.S. stores liquidated in 2018; 33,000 workers laid off with zero severance despite longstanding company policy
- •After Congressional hearings, Bain and KKR created a $20M hardship fund — about $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 intentionally bare in final years as PE owners stopped investing in inventory
- ▸After Congressional hearings, Bain and KKR offered a $20 million hardship fund — about $600 per displaced worker