NEW YORK – Amazon.com Inc., landlords who charge sky-high rents, brands that fail to adapt. The carnage in the retail industry has been blamed on all of them. Now Wall Street is too.
Over the past decade, 597,000 U.S. employees working for retailers owned by private equity firms and hedge funds have lost their jobs, while the sector as a whole added more than a million positions, according to a report by the Center for Popular Democracy and the Private Equity Stakeholder Project. The workers advocacy groups estimate that another 728,000 “indirect jobs” have disappeared at suppliers and local businesses, bringing the total casualties to about 1.3 million.
“It is unsurprising that 10 out of the 14 largest retail chain bankruptcies since 2012 were at private equity-acquired chains,” the study, titled “Pirate Equity,” said. “Wall Street firms are poised to impact an additional 1 million people working in retail in the coming years.”
Earlier this month, Sen. Elizabeth Warren unveiled a policy proposal to impose new rules on private equity firms, which she said often act like “vampires” when they buy a business by “bleeding the company dry.” The Democratic presidential candidate’s comments came about a year after fired Toys “R” Us Inc. workers urged Congress to press for changes in the way private equity deals are structured.
Of course, many would argue that shuttering stores across the U.S. is warranted because the country is “over-retailed” and many chains have been unable to keep up with the industry’s shift to online shopping.