Private Equity Takeovers: A List of Stores That Didn't Survive the Transition

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UK shop closures at record high in 2020
The retail industry has witnessed a significant surge in private equity takeovers in recent years. While these deals often promise a fresh injection of capital and new strategic direction, they can also lead to store closures, job losses, and a shift in the overall business landscape. In this article, we will explore a list of stores that have closed their doors after being taken over by private equity firms.
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The Rise of Private Equity in Retail

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Private equity firms have been actively investing in the retail sector, seeking to capitalize on undervalued assets and turnaround struggling businesses. These firms typically acquire a majority stake in the company, with the goal of restructuring and reselling it for a profit. However, this process can be brutal, with store closures and job cuts often following soon after.
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Here's a running list of retail store closures announced in 2019 ...

Stores That Didn't Survive the Private Equity Takeover

Record number of stores expected to permanently close this year
Here are some notable examples of stores that have closed after being acquired by private equity firms:
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Toys "R" Us: The iconic toy retailer was acquired by KKR and Bain Capital in 2005. Despite efforts to revamp the business, the company filed for bankruptcy in 2017 and closed over 700 stores. Sears: The struggling department store chain was acquired by ESL Investments, a hedge fund led by Edward Lampert, in 2019. However, the company continued to struggle, and hundreds of stores were closed. Gymboree: The children's clothing retailer was acquired by Bain Capital in 2010. Despite efforts to turnaround the business, Gymboree filed for bankruptcy in 2017 and closed over 300 stores. Payless ShoeSource: The discount shoe retailer was acquired by Golden Gate Capital and Blum Capital Partners in 2012. However, the company struggled to compete with online retailers and closed over 2,000 stores. RadioShack: The electronics retailer was acquired by Standard General in 2015. Despite efforts to revamp the business, RadioShack filed for bankruptcy in 2017 and closed over 1,000 stores.
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The Consequences of Private Equity Takeovers

The closure of these stores has had a significant impact on employees, customers, and the wider retail industry. The loss of jobs and storefronts can devastate local communities, while the shift to online shopping has left many malls and shopping centers struggling to fill vacant spaces.
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What's Next for Retail?

As the retail landscape continues to evolve, it's likely that we'll see more private equity takeovers and store closures. However, there are also opportunities for innovation and growth. Retailers that adapt to changing consumer habits and invest in e-commerce and digital marketing are more likely to thrive in this new environment. In conclusion, while private equity takeovers can bring much-needed investment and expertise to struggling retailers, they can also lead to store closures and job losses. As the retail industry continues to navigate this challenging landscape, it's essential to consider the human impact of these deals and the importance of preserving local businesses and communities.

If you're interested in learning more about the retail industry and the impact of private equity takeovers, be sure to check out our latest articles and industry insights.

Note: This article is for informational purposes only and should not be considered as investment advice.