Toys “R” Us is gone but not forgotten in the newly filed bankruptcy of Things Remembered, where private equity owner KKR & Co. has pushed to include extra pay and severance for everybody.
The retail chain is closing most of its 400 stores and selling the rest, but unlike Toys “R” Us, it’s offering hourly workers a raise and severance if they stick around to the end. That’s at the behest of KKR, according to a representative for the giant private equity firm, which controls a stake of about 30 percent.
KKR faced harsh criticism last year after Toys “R” Us creditors decided to shut the chain, leaving about 33,000 employees without severance. A months-long campaign by worker advocates spurred KKR and the chain’s other private-equity owner, Bain Capital, to set up a $20 million hardship fund.
The publicity prompted lawmakers including Senator Elizabeth Warren to call for the company’s lenders to chip in, and elevated the treatment of workers to a national issue. Advocates for the workers pointed out that the liquidation sales generating millions of dollars for lenders and advisers couldn’t happen if the hourly workers didn’t stay to help.
“Companies know that the public’s watching what they do and that people are concerned about how employees are being impacted, and so it’s smart business for these companies to make sure that employees being laid off have some kind of severance to make the transition,” said Carrie Gleason, policy director at Organization United for Respect, the group that organized workers to demand compensation.
This article was provided by Bloomberg News.