In the Matter of Staples/Essendant, Inc., File No. 1810180
Last year it was Toys R Us and Sears. This year, it could be Staples that billionaires destroy using their latest tool: the private equity fund. Private equity funds allow the wealthy to pool their money to buy out profitable companies, like Staples. The private equity fund then loads up the company with debt while slashing wages, benefits, and jobs, all to make more money for the wealthy investors. Eventually the fund either sells the gutted company -- or, in the case of Toys R Us, closes it entirely, even though the company still makes money, even though thousands of workers lose their jobs. Sycamore Partners, the firm that owns Staples, has already shut down most Nine West stores and picked apart companies like Hot Topic and Aeropostale to try to extract as much value as possible.1 Right now the Federal Trade Commission is taking public comment until the end of the month on Sycamore's attempt to merge Staples with another office supplier. If this merger goes through, investors in a private equity fund will have more power to reduce competition, close stores, and lay off workers.