Retail’s Private Equity Legacy: Big Debt, Big Problems

Neiman Marcus Inc., J. Crew Group, Sears Holdings Corp., The Limited, Rue 21…What do they all have in common? Private equity owners and the ills they bring.

Face it, big money doesn’t guarantee big success. While some of retail’s woes come down to simply bad luck, bad timing or shaky strategy, the root problem at many of the most troubled retailers today is the same: bad debt. And most of that came with private equity players that made the sellers — and sometime management — rich, but more often left the retailer hobbled and unable to adapt to the new environment.