Private Equity Has a Retail Problem

According to most accounts, 2017 was a solid year for U.S. private equity (PE). Money inflows into new buyout funds were strong and leveraged buyout (LBO) deal counts and debt-financing totals had their best year since 2007. However, one aspect of the PE world went unnoticed: PE-owned companies have accounted for an increasing share of all large Chapter 11 filings since early 2016, which is mostly a result of failed retailers. In an American Bankruptcy Institute (ABI) Journal article, Chuck Carroll and John Yozzo expose this trend, focusing on all large Chapter 11 filings since mid-2011 along with identified notable trends and characteristics of PE-owned and non-PE-owned retailers.