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UP / Thumb of Michigan | Toys R Us did the same thing K Mart did. That is, own real estate rather than lease it. It was the nail in K Marts coffin as well.
WalMart Realty owns some of the land the stores set on. Or, they lease it, or they enter into agreements with REITS. But they keep their options wide open.
But back to Toys R Us and K Mart. And Red Lobster. And a host of other companies that bet that owning their own stores and real estate under them was good business. Tursn out, its not in every case. Its not a sustainable plan.
Those companies generally got PE firms involved because they ran out of other options when it came time to remortgage.
On the other end of the spectrum, look at fast food companies. Lets use McDonalds. They don't sell hamburgers with fries. They sell franchises. Someone else can own the brick and mortar, thats not where the dough is for them. TSC leases stores, they don't own them. As do an awful lot of medical clinics. And that list grows annually.
Easy to blame the people who came in to clean up the mess- but they weren't the ones that got the companies there in the first place. | |
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And another thing.. Trumps tax cuts 49% benefit the top 5% of earners
