Economy Shirley Smith

How to Stop Private Equity From Destroying Your Job

It took greedy investors just three years to strip my employer for parts. We need to put an end to their destructive actions.
An Art Van store in Westland, Michigan advertises a liquidation sale. (Shutterstock)

By Shirley Smith | OtherWords

Not long ago, I was a saleswoman and manager at Art Van Furniture, a furniture retailer that was an institution in metro Detroit for over half a century.

It was more than a job. My coworkers were my family, and we were all proud to work for our company. Thanks to our hard work, Art Van had grown from a family-owned business with one location to the top performing furniture retailer in our state.

But all that changed in 2017, when the private equity firm Thomas H. Lee Partners bought the company out. Soon, the company I knew and loved began to vanish right in front of my eyes. Where we saw a strong company we were proud to work for, they saw something they could strip for parts.

By 2020, my job had become one of the over half a million retail jobs that have been destroyed by private equity big shots.

Here’s what happened.

Almost immediately after it bought the company, TH Lee used Art Van’s golden name to borrow massive amounts of money and saddle the company with debt. TH Lee also sold off Art Van’s real estate, then forced Art Van to pay rent on the same property it once owned.

My colleagues and I noticed bills weren’t being paid and shipments started getting delayed. Restocking merchandise used to take three to four weeks, but it suddenly started taking three to four months.

Then Art Van stopped doing business with our usual vendors. Instead, cheaper products once sold at outlet locations went into our main stores. Sure enough, customers started noticing that quality was falling even though the prices were rising.

We were the best trained retail staff in the industry and we did our best to make it work. But TH Lee cut back on staffing and replaced Art Van’s top-notch leadership with Ron Biore, who was rated one of the worst CEOs in America just two years before being hired.

Everything TH Lee did was setting up Art Van for failure. In just three years, they drove the top furniture retailer in Michigan into bankruptcy.

TH Lee’s initial severance offer was to give us $400 under the condition that we would not speak poorly of them to the media — they even said we should be grateful, because they didn’t actually have to give us anything.

They then cut off our health insurance before the company even officially closed. Coworkers of mine had to cancel surgeries, and several of us couldn’t get our prescriptions filled.

I wish I could say that Art Van was an exception, but private equity’s track record in retail has been absolutely horrible. Thousands of retail workers across the country have been through what we faced, according to a study by United for Respect, an organization I now work with, and Americans for Financial Reform, a Wall Street watchdog.

Through all this, TH Lee didn’t pay any price. That has to change.

In Michigan, there’s a bill to mandate severance payments when companies are driven to bankruptcy, so that workers have some financial stability after losing their jobs. We also need Congress to pass the Stop Wall Street Looting Act, a bill that would make private equity executives personally liable for the decisions they make and limit their use of debt to acquire companies.

My colleagues and I went through hell. Greedy executives should never have the power to drive thriving companies into bankruptcy just so they can make a profit. I can’t fix what happened to Art Van, but I can use my voice to make sure these abusive business practices do not victimize others.

Elected leaders must take action to prevent future private equity abuses.

Shirley Smith

Shirley Smith Shirley Smith is a 43-year veteran of retail furniture sales and an activist with United for Respect. This op-ed was distributed by OtherWords.org

7 comments

  1. I believe I heard about this activity a long time ago. It’s amazing it is still going on. I am so sorry that so many workers have gone through this.

    I don’t fully understand why banks would be able to loan so much money, how CEO’s make so much money and workers get next to nothing! Can you recommend where I can learn more about this?

    Sharon Lee

  2. There’s little point in trying to simply rein in predatory capitalism. Capitalism needs to be replaced not simply restrained.

  3. Cheap suits killing off thriving companies (stable decent livelihoods) for personal profit using capitalistic blood sucking vicious schemes for the murder weapon. Workers unite‼️Because given the nature of the Republican Party and the neoliberal Democratic Party establishment, only the workers united will stop this kind of malicious murder.

  4. Thank you for sharing your story and confirming from the inside what I as a consumer have noticed for decades regarding many companies. I hardly think better severance pay is the answer, although it can’t hurt. If companies are to be swallowed by larger ones until the only options are cartels and monopolies, that is a huge problem for workers and consumers, particularly when those cartels and monopolies basically own and run the 3 branches of our government, the military and the so-called ‘intelligence’ and police apparatus. Truth, freedom and democracy, even a representative one, they are all gone for the people. We foolishly overlooked how imperialists treated other people in other lands as those imperialists grew in power, wealth and ruthlessness. They are the evil in this world, not those they label ‘terrorists’, people fighting for dignity, sovereignty, the very right to exist in their own lands all around the world. The evil ones return their attention here when it suits them, to finish cannibalizing their own. Then we recognize it for the tyranny it is. Revolution. A dismantling of imperialism is appropriate for this cabal that feels entitled to mandate their ‘world order’ everywhere, Revolution is appropriate. We are only as safe as the weakest of the world.

  5. Against all evidence, Americans seem to jump for joy at the whole privatized capitalistic system they “enjoy”while using the words “authoritarian” against China and any country which dares to supply some benefits to its population. Socialism is wicked but “social media” using your private information and selling it to others for profit are grabbed ecstatically.

    The extension of “private equity” and such features as “public-private partnerships”could perhaps be seen as the partnerships between slaves and masters.

  6. The atrocity that destroyed Ms. Smith’s financial future is yet another example of how Neoliberalism is actually a subtle form of Neonazism.

    That’s because the Neoliberals’ obscenely profitable destruction of gainful employment is obviously part of our Masters’ long-range plan for radically reducing our Working Class numbers and condemning the survivors to inescapable slavery.

    Thus, by Nazi-advised postwar USian cunning, the German methodology of extermination c. 1933-1945 has been reduced to slow-motion murder euphemistically disguised as job losses and welfare
    cuts even as its ecogenocidal intent remains identical.

    But how else to con the Moronic Majority into voting itself dead?

    The only possible cure for this cancer is a restored labor movement — which of course our Masters will never allow.

    Indeed – as we are learning – their destruction of the Soviet Union also destroyed forever any remaining possibility of achieving the education and organization essential for true Working Class empowerment.

    Which is precisely why we — ourselves, our (alleged) civilization, our species, our planet — are doomed.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: