In a fluid retail environment, legacy brands have to adapt to the rising threat of e-commerce. But they’re so burdened by debt they lack the capital and flexibility needed to change course.
Were it not for that crushing debt, many would still be in business. Yes, the continued threats from Walmart, Target, and e-commerce would still exist. But Toys ‘R’ Us was running a profitable business when it announced it would be liquidating its assets and closing its hundreds of stores—it just didn’t have the kind of revenue, let alone profits, to pay nearly half-a-billion dollars in interest a year.
Amazon and other e-commerce sites are frequently blamed for the demise of the brick-and-mortar retail sector. This piece examines another factor: private equity firms that have saddled the retailers they "rescue" with untenable debt.
Read: The Real Retail Killer