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re: Toys R US Collapse Impact on Real Estate (Update: Bye Bye)
Posted on 3/15/18 at 12:22 pm to matthew25
Posted on 3/15/18 at 12:22 pm to matthew25
quote:I might be wrong, but I thought paying too much was the business plan. Way too much debt, lots of percentage-based fees, sell assets and make more fees, and watch it all go away and move on to the next future corpse.
Mitt Romney's firm was involved. Paid WAY too much.
IHeartRadio (formerly ClearChannel) just declared bankruptcy, too, under the same sort of circumstances, including Bain.
This post was edited on 3/15/18 at 12:25 pm
1
Posted on 3/15/18 at 1:05 pm to ATLdawg25
quote:
TRU was overleveraged to the point that they couldn’t cover their debt obligations. What is a toy vendor supposed to do, subsidize those payments with lower margins?
That CEO is rather full of it, and you have to wonder if that's part of the company's problem.
He's made a number of statements along the lines of "you're gonna miss us when we're gone". Yeah, I don't believe so.
Posted on 3/15/18 at 1:08 pm to tokenBoiler
quote:
I might be wrong, but I thought paying too much was the business plan. Way too much debt, lots of percentage-based fees, sell assets and make more fees, and watch it all go away and move on to the next future corpse.
The whole idea with an LBO is that the buyers actually "pay" very little. All the money comes from others.
The debt holders are gonna take a bath here, but even they got higher interest rates, and will get some cash out of the liquidation.
Posted on 3/16/18 at 11:04 am to ATLdawg25
quote:
In your update link - “...toy vendors will live to regret the day this happened.” What did any toy vendors do to cause this?
Without knowing the specifics, I would assume toy vendors sold products to rival companies that directly impacted traffic and sales at TRU. TRU is implying that without TRU, the vendors now just have those rival companies to sell to and they now hold all of the leverage.
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