Stories

Vulture capitalists are killing off retail jobs

Vulture carrying away a shopping cart
Illustration: Lazaro Gamio / Axios

Private equity buyouts account for 61% of the jobs lost and planned for elimination in the 2016 and 2017 retail apocalypse, according to a new study.

Quick take: Private equity snapped up retail chains like Sears and Toys 'r Us in more benign times. Amazon wasn't yet such a potent force, and buyout firms like Bain Capital and KKR — bursting with cash from institutional investors seeking high returns — saw strong profit possibilities in retail.

But when buyers massively turned to on-line shopping, many of these now-private equity-owned chains, laden with interest payments on the buyout debt, lacked free cash to pivot and compete, said Thomas Paulson of Inflection Capital Management.