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Mitt Romney and the demise of Anthony’s


Gazette staff October 31st, 2012

Remember the old Anthony’s stores?

Credit: Brad Gregg

Mitt Romney does, or at least he might, as detailed in a recent Newsweek story by David Stockman, former budget director in the Reagan administration.

As reported in the article, Romney’s private equity firm, Bain Capital, began buying up big-box retailers in the late 1980s and early ’90s that were failing amid the proliferation of Wal-Mart.

One of the stores Bain purchased was the publicly traded Stage Stores Inc. In spring 1997, Bain caused Stage to raise $300 million in new junk bonds with the proceeds going to purchase the C.R. Anthony Company.

The 250-store business had been established in Cushing. C.R. Anthony’s grandson is longtime Corporation Commissioner Bob Anthony.

After the purchase through Stage, most Anthony’s stores were renamed Stage. The company’s stock price doubled, while Bain and its partner, Goldman Sachs, unloaded their stock, according to Stockman.

You can probably guess what happened next.

Stockman dubs the deal a “bull market scam,” reporting that a year after Bain exited — the same year it acquired Anthony’s — sales begin to plummet, losing a total of $150 million from 1998 to 1999.

In other words, while Stage was already facing challenges with the Wal-Mart behemoth, the purchase of Anthony’s temporarily doubled the stock, then Bain sold out and left Stage with nothing but debt.

And that, as they say, was that.

 
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