Has private equity ever done anything good for anyone outside of the investors?

> Dollar stores are private equity with a checkout lane.

Dollar Tree and Dollar General are publicly traded.

So Family Dollar might be the result of PE tactics, but the other two aren't, and Dollar Tree sold Family Dollar because they saw it as under-performing.

It's actually sort of weird Dollar Tree couldn't make it work. I know the dollar stores all have somewhat different businesses, but you'd think that Dollar Tree could have either turned Family Dollar around or knew it was selling a loser (see the market for lemons) to PE.

And this is exactly why I only shop at Costco. While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well.

The sad thing is, people in rural areas that depend on places like Dollar General, and are getting fleeced blame everyone but republicans and they are usually in red areas

Family Dollar isn't a dollar store though.

When the goal isn't to run a good store but to extract value as fast as possible, all the classic PE patterns show up

Here's how shitty of a business person I am: I had no idea that the poor were a "market" you could prey upon.

Somehow I thought that if I presented a business plan that began, "Our target audience are those living paycheck to paycheck…" that I would be quickly shown the door.

Private equity is even more insidious than you can imagine.

How it works is that PE will buy a profitable company, and then strip out everything it can, and then load on the debt. In exchange for loading on the debt, the banks will give preferential treatment to the other companies in the PE fund's portfolio. <----- This is the part everyone misses.

In addition, they will force the company to purchase services and even entire companies from the PE company's fund portfolio. <----- This is the part everyone misses.

Then, after a year or so, PE will IPO the company and sell to retail suckers. Mutual fund companies will hold their nose and buy into the IPO even though everyone knows it's a shitty company. The reason why is because the PE company will give early access to investment in their other more promising companies. <---------- This is the part everyone misses.

So PE companies will make a lot of money by stripping every part of the company out, maximizing and leveraging its portfolio of other companies so that banks and mutual fund companies will dump money into them. It's literally like harvesting a farm animal and carving absolutely everything of value off of it, as well as leveraging other companies to dump into it with the promise of access to other companies in its portfolio.

And then they turn around and dump the carcass into the hands of retail suckers, either through their mutual funds like Fidelity or straight onto the markets.

Makes me wonder if the right way to help lower classes is to give them some space (association, platform) to meet and solve issues on their own terms so nobody tries to leech from them.

> They already run on a thin-staff, high-volume model.

Like every other retail business not targeting the top 5%.

And Dollar Tree and Dollar General are both publicly listed companies, not private equity.

Dollar Tree sold Family Dollar for $1B 10 years after buying it for $8.5B, a pretty big loss. Dollar Tree’s market cap is $25B, so a pretty negligible part of the national dollar store business is “private equity”.

Then why doesn't some other established brand open in the same area and undercut them?

> cosplaying as poverty relief

Does it really? Who says this, and who believes it?

Interesting. The Netherlands is no class society so rich or poor nobody has any goddamn shame to stand in line at the Action checkout if there's a good sale to be had.

Seeing people in BMWs at the Aldi parking lot. Strange country.

[dead]

[dead]

private equity is a tumor on this country. it seems any business stained with this actively becomes worse for the customer for as long as possible.

Kudos! This is beautifully succinct, elegant, and accurate writing.