We are in the midst of a mass extinction in retail. Over the past five years, dozens of retailers—once the bedrock of malls across the country—have shuttered. The most recent victim was Toys ‘R’ Us, which announced it was going out of business last week, a collapse that could cost as many as 33,000 jobs.

Many are blaming the stores themselves for failing to adapt to the rise of e-commerce and changing consumer habits. Others have pointed the finger at the rise of one-stop-shopping behemoths like Walmart and Target, both of which have made life hell for category killers like Toys ‘R’ Us. Some see the enduring impact of the Great Recession, while others still—including Toys ‘R’ Us—blame millennials for not having enough kids.



These explanations have some merit (with the exception of the millennials one). But the biggest ongoing threat to retail is debt. Over the past several years a number of major retailers have been saddled with billions of dollars in debt by private equity firms. Toys ‘R’ Us, for instance, was hit with over $5 billion in additional debt after it was acquired by private equity firms KKR and Bain Capital in 2006. With annual interest payments of over $400 million a year, Toys ‘R’ Us didn’t have a chance.

Private equity is remaking the retail environment, causing even successful companies like Toys ‘R’ Us to go out of business. And they’re fundamentally remaking American commerce in the process, with Amazon, Target, Walmart, and Dollar General set to benefit. Meanwhile, private equity is more or less getting off scot-free.

Retail is, of course, not the only target of private equity. Remington, the oldest manufacturer of firearms in the country, announced it was filing for bankruptcy on Monday. Remington faced specific challenges—most notably a nationwide decrease in gun sales following President Trump’s election—but private equity’s fingerprints were all over its collapse as well. The gun manufacturer was acquired by Cerberus Capital over a decade ago.

