KB, Bain Capital and Romney; toys and politics
From Gifts and Dec
KB Toys was a retailer that seemed to stay around long after it was dead. This chain of mall based toy stores struggled for years as it searched for a business model that would return it to its glory years when shopping malls were the rage and consumers had not yet become as obsessed with price.
It appears that, like in one of those mummy movies, KB has just sat up in its grave, drawn back to our world by the 2012 election. Mitt Romney, the Republican Presidential candidate, is one of the founders of Bain Capital, a private equity and venture capital investment company. Bain owned KB when it closed its doors under a bankruptcy filing in 2008. The bankruptcy of KB had an impact on the toy industry: 3,000 people lost jobs and a number of toy companies and sales representatives were negatively impacted.
I am going to let others discuss the political implications of Bain, KB and the election. I do think, however, that we are remiss in not analyzing the impact that Bain has had on the toy industry. After all, Bain has owned or owns the number one and number 2 toy chains: Toys R Us and KB. They
have also held positions in companies that were tangentially important to the toy industry like Burlington Coat Factory (carries toys); Brookstone (carried high tech toys) and Michaels (carries toys).
Over the course of my next two postings I am going to be taking a look at Bain through its performance at KB and Toys R Us so your insights are welcome. Bottom line, I want to look at what Bain's performancemay say about its strengths or weaknesses as a player in the toy industry.
If you worked for KB, were a vendor, a rep, an investor, an interested party or just plain interested, please let us know any insights you may have on two core question: Has Bain Capital been good for the toy industry? Has the toy industry been good for Bain Capital?