“Sycamore Partners has a history of stripping assets from retailers, leading to store closures and layoffs at retailers like Nine West and Aeropostale.”
In a letter delivered today, retail workers from Gymboree, Kmart, Sears, and Toys ‘R’ Us urged bankruptcy judge David R. Jones to think twice before letting private equity firm Sycamore Partners, currently the highest bidder, become the new owner of J.C. Penney.
Citing their own experiences working at retailers destroyed by private equity, they told the Judge:
“We have lived through the bankruptcy and liquidation of our Wall Street-owned retail companies, which includes Sears, Kmart, Toys ‘R’ Us, and Gymboree. We know the toll that a retail bankruptcy takes on our lives and our long-term financial stability.
“Some of us were planning to retire from our retail jobs and had to re-enter the job market for the first time in decades. Others of us struggled to make ends meet and provide for our children for over a year after losing our jobs.
“All of us experienced prolonged unemployment, took positions that paid less than the retail jobs we had worked hard at, or both. Job retention was an afterthought in each of our retail bankruptcies. However, we believe that preserving jobs must be a central consideration during the bankruptcy process, as well as the bidder’s history of building and retaining jobs in their other holdings.
“We do not want to see the same patterns repeat with J.C. Penney.”
J.C. Penney’s bankruptcy filing creates great uncertainty for thousands of employees, many of whom already experienced job loss when the company announcing it was closing 154 stores permanently.
Member leaders with United for Respect who signed the letter have won a multi-million dollar hardship fund for laid-off Toys ‘R’ Us employees, helped to pass the historic Guaranteed Severance Pay law in New Jersey, and lobbied elected officials to support the Stop Wall Street Looting Act. Most recently, they organized employees at Art Van Furniture to pressure its private equity owner, Thomas H. Lee, to establish a hardship fund, after the firm left 3,000 employees without a paycheck and health insurance amid the coronavirus pandemic.