Latest news with #businessModel
New York Times
02-07-2025
- Business
- New York Times
The Private Equity Wager: Heads We Win, Tails You Lose
BAD COMPANY: Private Equity and the Death of the American Dream, by Megan Greenwell In 2019, Megan Greenwell had only a 'vague sense' of how powerful private equity had become. Sure, she had heard the stories about Toys 'R' Us, the beloved retailer that went bankrupt after private equity firms bought out the company and saddled it with crushing amounts of debt. 'I knew private equity was a problem,' she writes in her new book, 'Bad Company.' 'I just thought it wasn't my problem.' At the time, Greenwell was the editor of Deadspin, an online sports magazine whose mix of investigative reporting and cheeky commentary had attracted a devoted readership. But the magazine and its sister sites were also losing $20 million a year. Enter a private equity firm named Great Hill Partners to the rescue — or not. Greenwell recalls how Deadspin's new owners seemed determined to come up with bad ideas that would run the website's brand into the ground. After three months of being micromanaged, she resigned in disgust: 'The firm's goal was never to make our website better or grow its readership. Great Hill Partners, and private equity at large, exists solely to make money for shareholders, no matter what that means for the companies it owns.' It's a business model that Greenwell writes about to potent effect in 'Bad Company,' which emphasizes the human costs of private equity. She says she started writing her book 'not out of spite, but out of pure curiosity.' Why did Great Hill Partners flourish financially after reducing Deadspin to a husk of its former self? (Last year the site was sold to a Maltese gambling outfit that uses it to 'drive traffic to online casinos.') Shouldn't a private equity firm make money when the company it buys makes money, and consequently lose money when it doesn't? How could a firm continue to bring in revenue while its acquisitions flounder? What is it like to work for a company whose owners don't necessarily have its best interests at heart? Twelve million Americans work for companies owned by private equity, which amounts to about 8 percent of the labor force. In 'Bad Company,' Greenwell tells the stories of four people whose lives have been upended by the industry. Liz Marin worked for six years at Toys 'R" Us; Roger Gose was a doctor in rural Wyoming; Natalia Contreras was a journalist for a local paper in Texas; Loren DePina lived in a private equity-owned apartment complex in Alexandria, Va. Their stories share a similar arc: tentative hopefulness followed by a rude awakening. 'Bad Company' is definitely a critical take on the industry, told through the point of view of its victims. But Greenwell offers stories that are textured, not one-note tales of woe. When Liz Marin started working for Toys 'R' Us in 2012, private equity had owned the company for seven years. Marin liked the fact that the company gave her the ability to advance and to transfer easily to other stores. Having worked in retail before, she was impressed by what she experienced at her new job. Toys 'R' Us stores seemed busy and well run. She even got a tiny tattoo of Geoffrey the Giraffe, the company mascot, on her left shoulder. Want all of The Times? Subscribe.
Wall Street Journal
23-06-2025
- Business
- Wall Street Journal
Axel Springer Aims to Boost Value With AI, Calls Time on Clicks-and-Ads Model
Axel Springer said it plans to double its value within five years supported by artificial intelligence, calling time on the business model of maximizing clicks and advertising. The German media group behind Politico and Business Insider outlined the goal of doubling its value on Monday, as part of a strategic update following a split of its publishing and classified-advertising businesses.
Bloomberg
06-06-2025
- Business
- Bloomberg
Rent the Runway's Comeback Plan
Rent The Runway's subscriber base is growing as the fashion rental company reworks its business model by offering more brands and debuting a new rewards program. Jennifer Hyman, CEO of Rent The Runway joined Bloomberg Open Interest to talk about the revamp. (Source: Bloomberg)
