News

Private equity owned US retailer files for bankruptcy. KB Toys, a 400 small store outfit is the latest retailer to file for bankruptcy this year. KB Toys employs almost 11,000 people, of which 4,000 represent full-time positions. 90% of KB Toys is owned by private equity investor Prentice Capital Management Inc. UNI Global Union General Secretary, Philip Jennings says:

“This is terrible news for the 11,000 staff of KB Toys and their families, particularly this close to Christmas. Private equity should engage with local unions and discuss job saving strategies before they get to the stage of bankruptcy. If there is a way of saving jobs in private equity portfolio companies before they declare themselves bankrupt, then we want to maximize this opportunity.”

UNI Global Union urges regulators to probe private equity to investigate the stability of portfolio companies and the risk to job loss. KB Toys is the fourth US retailer owned by private equity to fold along with other well known US retailers Linens ‘N Things, Mervyn’s, and Circuit City.

To read more about KB Toys: http://www.ft.com/cms/s/0/ab12722c-c7b6-11dd-b611-000077b07658.html