Over the last decade at least 600,000 people working at private equity-owned retailers have lost their jobs due to bankruptcies and store closures.
Over the last decade at least 600,000 people working at private equity-owned retailers have lost their jobs due to bankruptcies and store closures. Just since last summer, private equity-owned retailers such as Fairway, Art Van Furniture, and Fred’s have shut their doors. Yet for all the lost jobs, as of 2019 private equity-owned retailers still employed around a million workers in the US.
As the COVID-19 pandemic ravages the retail industry, private equity’s aggressive use of debt and collection of billions of dollars of dividends and fees from retailers raise particular concern for the industry and retail workers:
- According to the Bureau of Labor Statistics, the number of retail jobs in the U.S. fell by 2.1 million in April.
- The leveraged loan default rate for US retail hit a record high at 10.34% and is expected to continue climbing substantially.
- The Wall Street Journal reported that as of April 20, twenty-seven of the 38 retailers with the weakest credit profiles were owned by private-equity firms.