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| The Pandemic Helped Topple Two Retailers. So Did Private Equity. | The Pandemic Helped Topple Two Retailers. So Did Private Equity. |
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| J. Crew and Neiman Marcus were each facing a host of issues before the coronavirus pandemic forced them to close their stores and eventually file for bankruptcy, including trouble adjusting to the rise of e-commerce and a lack of connection with a new generation of shoppers. | J. Crew and Neiman Marcus were each facing a host of issues before the coronavirus pandemic forced them to close their stores and eventually file for bankruptcy, including trouble adjusting to the rise of e-commerce and a lack of connection with a new generation of shoppers. |
| But they also shared one increasingly common problem for retailers in dire straits: an enormous debt burden — roughly $1.7 billion for J. Crew and almost $5 billion for Neiman Marcus — from leveraged buyouts led by private equity firms. Like many other retailers, J. Crew and Neiman over the past decade paid hundreds of millions of dollars in interest and fees to their new owners, when they needed to spend money to adapt to a shifting retail environment. And when the pandemic wiped out much of their sales, neither had anywhere to go for relief except court. | But they also shared one increasingly common problem for retailers in dire straits: an enormous debt burden — roughly $1.7 billion for J. Crew and almost $5 billion for Neiman Marcus — from leveraged buyouts led by private equity firms. Like many other retailers, J. Crew and Neiman over the past decade paid hundreds of millions of dollars in interest and fees to their new owners, when they needed to spend money to adapt to a shifting retail environment. And when the pandemic wiped out much of their sales, neither had anywhere to go for relief except court. |
| “Much of the difficulty that the retail sector is experiencing has been aggravated by private equity involvement,” said Elisabeth de Fontenay, a professor at the Duke University School of Law who specializes in corporate finance. “To keep up with everybody’s switch to online purchasing, there really needed to be some big capital investments and changes made, and because these companies were so debt strapped when acquired by private equity firms, they didn’t have capital to make these big shifts.” | “Much of the difficulty that the retail sector is experiencing has been aggravated by private equity involvement,” said Elisabeth de Fontenay, a professor at the Duke University School of Law who specializes in corporate finance. “To keep up with everybody’s switch to online purchasing, there really needed to be some big capital investments and changes made, and because these companies were so debt strapped when acquired by private equity firms, they didn’t have capital to make these big shifts.” |
| The filings by J. Crew and Neiman Marcus followed a wave of retail bankruptcies in the past few years, and came as numerous chains, including J.C. Penney, teetered on the brink because of the pandemic. | The filings by J. Crew and Neiman Marcus followed a wave of retail bankruptcies in the past few years, and came as numerous chains, including J.C. Penney, teetered on the brink because of the pandemic. |
| In July, a report from the Center for Popular Democracy, a progressive advocacy group in Brooklyn, said 10 of the 14 largest retail chain bankruptcies since 2012 involved companies that private equity firms had acquired. | In July, a report from the Center for Popular Democracy, a progressive advocacy group in Brooklyn, said 10 of the 14 largest retail chain bankruptcies since 2012 involved companies that private equity firms had acquired. |
| Barneys New York went into liquidation in November, and Zac Posen, owned by Yucaipa Companies, closed the same month. In March 2019, the North American operation of the Italian brand Roberto Cavalli declared bankruptcy when its private equity owner, Clessidra, failed to sell its stake. In early April, the British department store chain Debenham’s filed for protection for the second time in less than a year. | Barneys New York went into liquidation in November, and Zac Posen, owned by Yucaipa Companies, closed the same month. In March 2019, the North American operation of the Italian brand Roberto Cavalli declared bankruptcy when its private equity owner, Clessidra, failed to sell its stake. In early April, the British department store chain Debenham’s filed for protection for the second time in less than a year. |
| “You need so much money to keep the stores open, so much money to keep the inventory flowing — an average department store will have 2,500 brands — you need to invest in building, you need to invest in staffing, and most P.E. firms don’t want to make investment before they start seeing the return,” said Marigay McKee, founder of MM Luxe Consulting and a former president of Saks Fifth Avenue. | “You need so much money to keep the stores open, so much money to keep the inventory flowing — an average department store will have 2,500 brands — you need to invest in building, you need to invest in staffing, and most P.E. firms don’t want to make investment before they start seeing the return,” said Marigay McKee, founder of MM Luxe Consulting and a former president of Saks Fifth Avenue. |
| Private equity firms have been involved with retailers for decades. But the collapse of Toys “R” Us in 2017 put a spotlight on how major buyouts by the firms could go sideways. The chain had been burdened with $5 billion in debt from a 2005 leveraged buyout by the private equity firms Bain Capital and Kohlberg Kravis Roberts and the real estate firm Vornado Realty Trust, and it did not have sufficient funds to invest in its stores and e-commerce business during a crucial period of growth for Amazon and Walmart. | Private equity firms have been involved with retailers for decades. But the collapse of Toys “R” Us in 2017 put a spotlight on how major buyouts by the firms could go sideways. The chain had been burdened with $5 billion in debt from a 2005 leveraged buyout by the private equity firms Bain Capital and Kohlberg Kravis Roberts and the real estate firm Vornado Realty Trust, and it did not have sufficient funds to invest in its stores and e-commerce business during a crucial period of growth for Amazon and Walmart. |
| It was eventually liquidated, and more than 30,000 workers were laid off. The workers were not paid severance — even as creditors, bankruptcy lawyers and consultants received payments — until they lobbied pension funds, which invest heavily in funds managed by private equity firms. The situation galvanized politicians and union activists and spurred public outrage. | It was eventually liquidated, and more than 30,000 workers were laid off. The workers were not paid severance — even as creditors, bankruptcy lawyers and consultants received payments — until they lobbied pension funds, which invest heavily in funds managed by private equity firms. The situation galvanized politicians and union activists and spurred public outrage. |
| J. Crew, which owns Madewell, and Neiman Marcus, which owns Bergdorf Goodman, have vowed to stay in business, but bankruptcies inevitably raise questions about what the future holds for employees, stores and vendors. | J. Crew, which owns Madewell, and Neiman Marcus, which owns Bergdorf Goodman, have vowed to stay in business, but bankruptcies inevitably raise questions about what the future holds for employees, stores and vendors. |
| The bankruptcies have also shown how running retail companies requires a specific skill set, particularly when it comes to fashion. | The bankruptcies have also shown how running retail companies requires a specific skill set, particularly when it comes to fashion. |
| Clothing is an almost entirely discretionary purchase, dependent not just on cycles within the economy but on consumer taste and the images of the brands themselves. Private equity funds often find themselves “seduced a little by the hypified names,” said Sandeep Dahiya, an associate professor of finance at Georgetown University. | Clothing is an almost entirely discretionary purchase, dependent not just on cycles within the economy but on consumer taste and the images of the brands themselves. Private equity funds often find themselves “seduced a little by the hypified names,” said Sandeep Dahiya, an associate professor of finance at Georgetown University. |
| Private equity has been flirting with fashion retail since at least 1987, when the Bahrain-based Investcorp began buying shares in the beleaguered family-run Italian brand Gucci, turning the loss-making company around. It cashed out in an initial public offering in 1996, setting a model for the industry and paving the way for such deals as TPG’s 1999 purchase of Bally, Permira’s 2007 acquisition of Valentino Fashion Group and the triple flip of Jimmy Choo from Equinox to Lion Capital to TowerBrook. | Private equity has been flirting with fashion retail since at least 1987, when the Bahrain-based Investcorp began buying shares in the beleaguered family-run Italian brand Gucci, turning the loss-making company around. It cashed out in an initial public offering in 1996, setting a model for the industry and paving the way for such deals as TPG’s 1999 purchase of Bally, Permira’s 2007 acquisition of Valentino Fashion Group and the triple flip of Jimmy Choo from Equinox to Lion Capital to TowerBrook. |
| Carlyle acquired 48 percent of the Italian fashion brand Moncler in 2008, right as its puffer jackets exploded in popularity. It exited in 2014, the year after Moncler went public. Other private equity deals had mixed results, but Carlyle’s success — combined with a booming luxury sector, especially in Asia, and the lure of real estate embodied by store networks — enticed private equity investors. They saw retail as a cash-generating business, with management often composed of founders or families that could be shaken up and streamlined. | Carlyle acquired 48 percent of the Italian fashion brand Moncler in 2008, right as its puffer jackets exploded in popularity. It exited in 2014, the year after Moncler went public. Other private equity deals had mixed results, but Carlyle’s success — combined with a booming luxury sector, especially in Asia, and the lure of real estate embodied by store networks — enticed private equity investors. They saw retail as a cash-generating business, with management often composed of founders or families that could be shaken up and streamlined. |
| “Retail used to be kind of a golden goose for private equity firms, because in order for an LBO to work, the company has to be fairly mature with fairly regular cash flows,” Ms. de Fontenay said. “Under normal conditions, that’s kind of the definition of retail.” | “Retail used to be kind of a golden goose for private equity firms, because in order for an LBO to work, the company has to be fairly mature with fairly regular cash flows,” Ms. de Fontenay said. “Under normal conditions, that’s kind of the definition of retail.” |
| It “works out just fine as long as the economy and sector you’re invested in continues to grow,” she added. “If the sector is shrinking, it has been bad news.” | It “works out just fine as long as the economy and sector you’re invested in continues to grow,” she added. “If the sector is shrinking, it has been bad news.” |
| Neiman Marcus was first taken off the market for about $5.1 billion in a 2005 leveraged buyout by TPG and Warburg Pincus. The company was then sold in 2013 to a group led by the private equity firm Ares Management and the Canada Pension Plan Investment Board in a $6 billion deal. | Neiman Marcus was first taken off the market for about $5.1 billion in a 2005 leveraged buyout by TPG and Warburg Pincus. The company was then sold in 2013 to a group led by the private equity firm Ares Management and the Canada Pension Plan Investment Board in a $6 billion deal. |
| Steve Dennis, founder of SageBerry Consulting and a Neiman Marcus strategy executive from 2004 to 2008, said he knew of at least one firm that backed away from the price tag of the second sale “based on the significant amount of growth to justify it.” | Steve Dennis, founder of SageBerry Consulting and a Neiman Marcus strategy executive from 2004 to 2008, said he knew of at least one firm that backed away from the price tag of the second sale “based on the significant amount of growth to justify it.” |
| “Anything that would take more than a trivial amount of capital and have a longer payout time doesn’t generally fit with a private equity model,” Mr. Dennis said. | “Anything that would take more than a trivial amount of capital and have a longer payout time doesn’t generally fit with a private equity model,” Mr. Dennis said. |
| Neiman Marcus filed to go public in 2015, but an I.P.O. never materialized. The company, which said in court filings that it employed about 13,200 people, including 9,500 full-time staff, has spent much of the last two years trying to restructure its roughly $5 billion in debt, on which it has paid hundreds of millions of dollars in interest. Its revenue was $4.9 billion in its last public annual report, which was for the year that ended in July 2018. | Neiman Marcus filed to go public in 2015, but an I.P.O. never materialized. The company, which said in court filings that it employed about 13,200 people, including 9,500 full-time staff, has spent much of the last two years trying to restructure its roughly $5 billion in debt, on which it has paid hundreds of millions of dollars in interest. Its revenue was $4.9 billion in its last public annual report, which was for the year that ended in July 2018. |
| Moody’s said last May that Neiman Marcus’s debt levels had reached “unsustainable levels.” | Moody’s said last May that Neiman Marcus’s debt levels had reached “unsustainable levels.” |
| One of Neiman Marcus’s most valuable assets — the luxury e-commerce retailer MyTheresa — was not part of the bankruptcy filing. A group of bondholders have been arguing since 2018 that MyTheresa’s assets were improperly transferred to the company’s owners, leaving little to protect holders of the company’s unsecured debt. | One of Neiman Marcus’s most valuable assets — the luxury e-commerce retailer MyTheresa — was not part of the bankruptcy filing. A group of bondholders have been arguing since 2018 that MyTheresa’s assets were improperly transferred to the company’s owners, leaving little to protect holders of the company’s unsecured debt. |
| Marble Ridge Capital, a hedge fund that holds some of Neiman’s bonds, wrote in a public letter to the owners last month that “you have left a carcass of a company for the remaining stakeholders and have put both Neiman’s storied franchise and thousands of jobs at risk.” | Marble Ridge Capital, a hedge fund that holds some of Neiman’s bonds, wrote in a public letter to the owners last month that “you have left a carcass of a company for the remaining stakeholders and have put both Neiman’s storied franchise and thousands of jobs at risk.” |
| Alex Yankus, a representative for Ares, declined to comment. Darryl Konynenbelt, a representative for the Canada Pension Plan Investment Board, declined to comment. | Alex Yankus, a representative for Ares, declined to comment. Darryl Konynenbelt, a representative for the Canada Pension Plan Investment Board, declined to comment. |
| Updated June 12, 2020 | Updated June 12, 2020 |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Amber Seikaly, a spokeswoman for Neiman Marcus, said that since 2014, the company had “invested over $1 billion of capital into our business,” including in new and existing stores, technology and its digital presence. | Amber Seikaly, a spokeswoman for Neiman Marcus, said that since 2014, the company had “invested over $1 billion of capital into our business,” including in new and existing stores, technology and its digital presence. |
| J. Crew has also faced a rocky road after its $3 billion leveraged buyout by TPG and Leonard Green & Partners in 2011. It weathered fashion missteps, management changes, quality complaints and a general identity crisis. But its debt and related expenses also ate up cash that hurt the company’s ability to reinvest in its products, supply chain and e-commerce platforms. | J. Crew has also faced a rocky road after its $3 billion leveraged buyout by TPG and Leonard Green & Partners in 2011. It weathered fashion missteps, management changes, quality complaints and a general identity crisis. But its debt and related expenses also ate up cash that hurt the company’s ability to reinvest in its products, supply chain and e-commerce platforms. |
| Americans for Financial Reform, a consumer advocacy group, estimated that J. Crew had paid more than $760 million in dividends and fees to its ownership group since 2011. Those distributions are shared with investors in funds managed by the private equity firms. | Americans for Financial Reform, a consumer advocacy group, estimated that J. Crew had paid more than $760 million in dividends and fees to its ownership group since 2011. Those distributions are shared with investors in funds managed by the private equity firms. |
| Before it began furloughs during the pandemic, J. Crew had 13,000 employees worldwide, with 4,000 full-time workers, according to court documents. | Before it began furloughs during the pandemic, J. Crew had 13,000 employees worldwide, with 4,000 full-time workers, according to court documents. |
| Luke Barrett, a representative for TPG, said that the bankruptcy was “a significant disappointment for everyone” and that the investment “ultimately created loss for both TPG and our investors.” | Luke Barrett, a representative for TPG, said that the bankruptcy was “a significant disappointment for everyone” and that the investment “ultimately created loss for both TPG and our investors.” |
| “When Covid-19 forced the closure of the company’s entire store operations, we worked quickly to modify the capital structure and create a new ownership structure that will serve the long-term interests of J. Crew, its employees and its customers,” he said. | “When Covid-19 forced the closure of the company’s entire store operations, we worked quickly to modify the capital structure and create a new ownership structure that will serve the long-term interests of J. Crew, its employees and its customers,” he said. |
| A representative for Leonard Green declined to comment. | A representative for Leonard Green declined to comment. |
| “One of the defenses of private equity right now is, they’re saying these are structurally declining businesses already, and, look, that is a part of it,” said Andrew Park, a senior policy analyst at Americans for Financial Reform. “But again, having to service that debt makes these businesses hard, and when you see these companies blatantly taking money away, that’s the element that has really led to criticism.” | “One of the defenses of private equity right now is, they’re saying these are structurally declining businesses already, and, look, that is a part of it,” said Andrew Park, a senior policy analyst at Americans for Financial Reform. “But again, having to service that debt makes these businesses hard, and when you see these companies blatantly taking money away, that’s the element that has really led to criticism.” |
| Mr. Dahiya, the Georgetown professor, said he expected more bankruptcies from retailers backed by private equity firms given the current environment and that he thought it could potentially become a political issue. | Mr. Dahiya, the Georgetown professor, said he expected more bankruptcies from retailers backed by private equity firms given the current environment and that he thought it could potentially become a political issue. |
| “If there is a big retail bankruptcy or liquidation with a lot of job losses and P.E. is involved,” he said, “that would be like catnip to politicians, because retail is something that touches you and me, unlike, say, chemicals.” | “If there is a big retail bankruptcy or liquidation with a lot of job losses and P.E. is involved,” he said, “that would be like catnip to politicians, because retail is something that touches you and me, unlike, say, chemicals.” |
| Peter Eavis contributed reporting. | Peter Eavis contributed reporting. |
| Contact Sapna Maheshwari at sapna@nytimes.com or Vanessa Friedman at vanessa.friedman@nytimes.com. | Contact Sapna Maheshwari at sapna@nytimes.com or Vanessa Friedman at vanessa.friedman@nytimes.com. |