New York
THE Payless shoe company was already on its way to becoming another retail victim of the Internet when the private equity guys showed up.
That the firms - Golden Gate Capital Inc and Blum Capital Partners - weren't able to turn Payless around after acquiring them in 2012 isn't so surprising. That they've still made out so handsomely is.
As Payless shutters hundreds of stores and struggles to repay US$665 million of debt, Golden Gate and Blum turned a profit on the deal. How? By having Payless borrow millions in the financial markets, a move that's pushing the company to the brink. The firms have collected US$350 million from Payless through debt-funded special dividends.
Golden Gate and...
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