Congrats!? Your business has been “rescued”
Dec 3, 2019
Episode 142

Congrats!? Your business has been “rescued”

Oh, and you're laid off. Today we're talking about private equity and leveraged buyouts; how they work and how they go wrong.

Toys R Us, Payless, Brookstone, Sports Authority, Gymboree. Maybe you remember shopping at some of these stores? It would have been a few years ago. You may remember more recently reading elegies when the stores shut down.

One thing these retailers have in common? All were “rescued” by private equity Wall Street firms that saw the value in a faltering brand in need of a revamp. When that didn’t pan out, there were layoffs, Chapter 11 filings and, in one case, a confusingly named football stadium. And we’re just talking about retail. But actually, private equity permeates everyday life.

All the bankruptcies, store closings and layoffs add up to a real economic cost. One study [PDF] from July said private equity is directly responsible for more than half a million jobs lost in the past decade alone, and indirectly responsible for up to 1.3 million. All of this fallout is attracting attention from progressive politicians, who say private equity serves as “exhibit A” in the case for regulating Wall Street.

Marketplace’s Marielle Segarra covered the Toys R Us closure extensively, and she’s on the show today to talk us through private equity, how these buyouts work and how they go wrong.

But what could go right? Well, you tell us. As the end of the year approaches, we’re looking for your predictions … right or wrong. Turn your crystal ball toward 2020 and tell us what you see coming by sending a voice memo to

Thanks again to everyone who wrote in for last week’s Explainathon. Digital producer Tony Wagner answered our one “pass.” For even more “Make Me Smart” explainers, subscribe to our newsletter. Here’s last week’s issue, if you missed it.

None of us is as smart as all of us.

No matter how bananapants your day is, “Make Me Smart” is here to help you through it all— 5 days a week.

It’s never just a one-way conversation. Your questions, reactions, and donations are a vital part of the show. And we’re grateful for every single one.

Donate any amount to become a Marketplace Investor and help make us smarter (and make us smile!) every day.

The team

Marissa Cabrera Producer
Bridget Bodnar Senior producer
Tony Wagner Digital Producer