Toys "R" Us employees demand severance for 33,000
After more than three decades of working at Toys "R" Us, store manager Tracy Forbes isn't happy that she and 33,000 other workers are losing their jobs and not getting severance pay, while the company's private-equity owners are walking off with millions. And she's trying to do something about it.
"Every Toys "R" Us worker is leaving with zero, and Bain Capital is leaving with $475 million in profits," said Forbes, citing a report by Bloomberg that the private-equity owners -- KKR (KKR), Bain Capital and Vornado Realty Trust (VNO) -- had collected more than $470 million in fees and interest payments from Toys "R" Us during the past few years.
Forbes, who started with the now-bankrupt retailer in 1987 as an assistant manager in Long Island, New York, believes companies should not be allowed to buy out other companies by taking on huge loans.
Hobbled by debt stemming from the $6.6 billion leveraged buyout by KKR, Bain Capital and Vornado in 2005, the big-box toy seller's demise was years in the making. After declaring bankruptcy in September, the iconic chain in March sought a bankruptcy court's approval to start closing its 735 U.S. stores.
In Washington, D.C., as part of a campaign supported by the advocacy groups Center for Popular Democracy and the Organization United for Respect, Forbes and other employees of the retailer on Tuesday called on lawmakers to curtail private-equity firms from leveraged buyouts that prefaced Toys "R" Us's downward spiral. And they're demanding that laid-off workers get a fair severance settlement.
"We're here to speak to Congress to act on these laws, to make it impossible to do this to other retail workers," said Forbes, who has managed a Babies "R" Us store in Phoenix, Arizona, for the last 10 years.
"As a manager, I'm trying to make sure my team members are taken care of," she added, describing those she supervises as "about 30 mostly hard-working women supporting families."
When the retailer eliminated positions in the past, severance was always paid, according to Forbes. She's continuing to work at the retailer until her store closes for good at the end of June. Workers have now been told that "vacations that people worked for and earned would not be paid," she said, and that severance wouldn't be paid.