KB Toys was a retailer that seemed to stay around long after it was dead. This chain of mall based toy stores struggled for years as it searched for a business model that would return it to its glory years when shopping malls were the rage and consumers had not yet become as obsessed with price.
It appears that, like in one of those mummy movies, KB has just sat up in its grave, drawn back to our world by the 2012 election. Mitt Romney, the Republican Presidential candidate, is one of the founders of Bain Capital, a private equity and venture capital investment company. Bain owned KB at the time it filed its first bankruptcy in 2004. The company came out of bankruptcy when it was purchased in 2005 by Prentice Capital Management. It was under the ownership of the latter that the decision was made to liquidate the company in 2008. [Correction: In an earlier version of this article I stated that Bain Capital owned KB when it filed for bankruptcy in 2008. This was incorrect. Bain was the owner when KB filed for bankruptcy the first time, in 2004.]
I am going to let others discuss the political implications of Bain, KB and the election. I do think, however, that we are remiss in not analyzing the impact that Bain has had on the toy industry. After all, Bain has owned or owns the number one and number 2 toy chains: Toys R Us and KB. They
Over the course of my next two postings I am going to be taking a look at Bain through its performance at KB and Toys R Us so your insights are welcome. Bottom line, I want to see what Bain’s performance says about its strengths or weaknesses as a player in the toy industry.
If you worked for KB, were a vendor, a rep, an investor, an interested party or just plain interested, please let us know any insights you may have. Let us know your thoughts on two core question: Has Bain Capital been good for the toy industry? Has the toy industry been good for Bain Capital?