Workers from Toys “R” Us stores across America set up a mock graveyard in the New York City lobby of private-equity giant Bain Capital on Monday. The gravestones read “Toys R Us: 1957-2018” and “Here Lies Geoffrey [the Toys “R” Us mascot], Killed by Wall Street Greed.” Alicia Henson of Lexington, Kentucky, a pregnant woman holding a child in her arms, began to speak about her time with the company. She was jostled by a security guard attempting to shut down the protest. After other workers separated them, Cheryl Claude of South River, New Jersey, took the megaphone.
“Thirty-three years of giving my life for this company, and you guys are taking everything away from every one of us. You guys ought to be ashamed of yourselves.”
The Bain Capital protest was part of a series of actions demanding a modicum of dignity from financiers who drove Toys “R” Us into the ground. All 735 Toys “R” Us stores in America will be closing by the end of June, and 33,000 workers will not only lose their jobs; they won’t be receiving severance pay, even if they worked for the company for decades.
Previously the company paid severance after any downsizing; those days are over. In many states workers will also lose unused vacation and sick-leave pay. Yet executive bonuses, including for disgraced CEO Dave Brandon, were paid out before the company filed for bankruptcy; only the workers were left high and dry.
“The big dogs are getting away with murder,” said Romerick Anderson, an assistant store manager from Ontario, California, who helped organize 11 workers in his area to come east to protest. “When does it stop?”
The story is another chapter in our financialized economy, where benefits flow to the C-suites instead of those doing the work. Toys “R” Us succumbed to a private-equity bust-out, where financial firms load companies up with debt, strip out the profits, and leave destruction in their wake. “I compare private equity to an otter,” said Congressman Bill Pascrell (D-NJ), whose state houses the corporate headquarters of Toys “R” Us. “It tears open a clam, takes the meat, and throws away the shell. It’s people being tossed away.”
Bain and two partners, KKR and Vornado Realty Trust, bought Toys “R” Us in 2005 in a leveraged buyout, using $1.3 billion of their own cash and $5.3 billion in debt. The debt weighed heavily on Toys “R” Us, as it made between $450 and $500 million in annual debt-service payments, along with advisory and management fees to the private-equity overlords. Over the lifetime of the arrangement, Bain, KKR, and Vornado managers took in $470 million, money workers helped the company earn. “It was a business that turned into an ATM machine for Wall Street,” said Carrie Gleason of the Center for Popular Democracy, which is assisting the worker’s campaign with Rise Up Retail, a partnership with Organization United for Respect.