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12/17/2020 | Raising the Bar for Workers and Families

Double Exposure: Retail workers nationwide hammered by the combo crisis of pandemic and private equity

Private equity has had a disastrous impact on the retail industry, driving dozens of firms into bankruptcy, shutting down tens of thousands of stores, and costing hundreds of thousands of jobs nationwide.
    These layoffs upend the already fragile economic security of the low-paid and often Black and Brown women who work in retail. Private equity retail shutdowns also undermine local economies when retailers large and small disappear, compromising the future of shopping centers and eroding local sales and business tax revenues.
    Private equity is an especially predatory type of Wall Street investment firm that has taken over scores of national and regional retail chains. The private equity business model poses considerable risks to retailers and workers. Private equity relies on extractive financial engineering — including imposing high-debt loads from leveraged buyouts, wringing out value in fees and dividends, and stripping out real estate assets — that impose severe burdens on the retail takeover targets.
    The private equity-owned retailers have often collapsed into bankruptcy as they are unable to service the large debt loads. While the private equity firms and executives walk away largely unscathed or even profiting from the deals that led to the retailer’s collapse, hundreds of thousands of women and people of color in frontline retail jobs have lost their livelihoods, often with no severance and no recourse. Download the report to learn more.