Friday, January 13, 2012

When Mitt Romney came to town, KB Toys closed

The following half-hour-long attack ad presented as a muckracking documentary was released earlier this week by Winning Our Future, the Super PAC associated with Newt Gingrich.

I'll have lots more to say about this video and the reaction to it later. Right now, I'll just share my personal connection to the events protrayed in it.

The video briefly describes the role that Bain Capital had in the demise of KB Toys, where I shopped for my kids' toys all during the 90s. Later, a friend of mine worked there and lost her job about the time the chain first went bankrupt. Here's the relevant section from the chain's Wikipedia entry.
KB Toys was purchased and taken private in 2000 by the leveraged buyout firm of Bain Capital for $305 million, Bain announced the purchase on Dec. 8th, 2000. Only $18 million of the purchase money was cash, the rest was borrowed against the assets of the company. Sixteen months after the buyout, Bain Capital paid itself $85 million in dividends in early 2002. Two years later, due to increasing competition from national discount chains such as Wal-Mart and Target and its enormous debt, on January 14, 2004, K·B Toys filed for Chapter 11 bankruptcy protection and closed 365 stores.
I'd been wondering for years how such a successful and popular enterprise could have declined and disappeared so quickly. Thanks to this video, now I have an answer. Thanks a lot, Willard M. Romney. Your first name is truth in advertising. You are a rat.

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