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Mona Shield Payne
Republican presidential candidate Mitt Romney delivers his victory speech at the Nevada Republican caucus Saturday, Feb. 4, 2012, at the Red Rock Hotel and Casino in Las Vegas.
Tuesday, May 15, 2012 | 2 a.m.
Beyond the Sun
With President Barack Obama’s campaign launching an offensive to paint Republican candidate Mitt Romney’s time as head of a private equity firm in a negative light, here’s the Nevada connection: Between 2000 and 2002, Stage Stores, a clothing chain, shut down three stores in rural Nevada as part of a bankruptcy.
The stores’ closures came after Bain Capital had sold off its interest in the company in 1999. Obama’s campaign said the chain had been saddled with debt after an aggressive expansion under Bain, and after Bain made $170 million profit from the investment.
Nationally, 5,795 workers at Stage, which sells name-brand clothing in small to mid-sized cities, were laid off between 1999 and Feb. 2002, according to the Obama campaign.
It’s unknown how many workers were laid off in the Nevada stores in Winnemucca, Elko and Fallon.
In Winnemucca, 166 miles northeast of Reno, Rich Stone, owner of a dry cleaner next to the former Stage Store, remembers the retailer as a fine fit for the community.
Since it closed, residents of the small town of 8,900 and surrounding Humboldt County can’t buy non-Western-themed clothes there. They have to travel to Reno or shop online, Stone said.
“It’s a void,” said Stone, who is also a city councilman and a Republican. “We lose a lot of sales tax revenue.”
In its place now is a Boot Barn, which sells Western apparel and boots.
Stone was philosophical about the store’s closure.
“That’s America. That’s capitalism,” he said. “If somebody’s not making money, they’re not going to do it. You’re not going to keep it open as welfare for people without jobs. That’s just common sense.”
Romney’s experience in the private sector has been a key argument in his campaign to become president, pointing to his record turning around companies like Staples and Sports Authority. The Romney campaign, while it could not discuss the Stage Stores case in detail on Monday, said that companies he had invested in while in the private sector had created thousands of jobs.
But Romney’s time there also provides ammunition for Obama’s campaign. In an Obama campaign ad released Monday, a steelworker in Kansas City called Bain a “vampire” for sucking out money from GS Technologies.
Sarah Pompei, a spokeswoman with Romney’s campaign, said, “We welcome a discussion about jobs and the economy. President Obama thinks economic development means rewarding his donors with taxpayer money from the so-called stimulus.”
She said Obama’s campaign “has chosen to attack the free market.” The jobless “deserve a leader who understands how the economy works,” she said.
The Stage case also focuses attention on private equity firms, like Bain Capital, that buy inefficient companies, take them private and resell them at a profit.
Bain Capital, which Romney co-founded before he left in 1999 to head the Winter Olympics in Salt Lake City, bought regional retailers in the 1980s and consolidated them under the Stage Stores brand in the 1990s. The company went public in 1996. It filed for bankruptcy in 2000 and closed 331 stores.
Joseph Gilbert, a professor of management in the Lee School of Business at UNLV, said the record of private equity firms is mixed.
“There are cases where private equity firms have really helped companies,” he said. “They have put in better managers, cut excess fat.”
But there are also cases where the firms have taken out loans to give executives bonuses and left the companies “saddled with debt.”
“Sometimes, they’ve fixed the company into bankruptcy, which is a sad ending for everybody,” Gilbert said.
Currently, Stage has 13,000 employees and 800 stores in the United States, according to the company’s website. That’s twice as many as after it filed for bankruptcy.
Capitalism isn't the welfare office. Something the takers are more familiar with.
Mr. Car Elevators has some explaining to do.
I have an idea: if there is a "void" and a need for such a store, why doesn't Stone or some one else in Winnemucca pony up the funds to open one? What's stopping them? BTW, the Sun should be the last one casting stones in a glass house, what with all the employees Greenspin has laid off and businesses he has shut down over the past 10 years. The fact is, in order to survive, businesses fire or lay off employees all the time. I know, I've owned small businesses and have gone belly up in some and was successful in others and, at times, I fired workers or laid them off to keep the doors open. That wasn't enough in some cases and I eventually closed the doors. In the successful ones, I hired additional people. To the uninformed, apparently it's a shock to learn not all business ventures succeed.
"Since it closed, residents of the small town of 8,900 and surrounding Humboldt County can't buy non-Western-themed clothes there. They have to travel to Reno or shop online, Stone said."
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I find it incredibly difficult to believe that the Wal-Mart Supercenter in Winnemucca doesn't sell clothes, considering that every other Wal-Mart in the country does.
This is what Vulture Capitalism in Romney's Hedge Fund Bain Capital is. Then after you Raid the Company and Employee Pension Fund, you take them to Bankruptcy and leave the Taxpayer to pay the Employees Pensions, all the while making a nice profit for yourself. Yes, Socialism/Capitalism on Steroids - And since the 1% writes The Laws, It's ALL Legal. Morally empty though.
It kind of sounds like Mitt was involved in a pump and dump. Maybe the SEC should investigate.
Another anti-GOP story by the Sun. If there's a viable market in Winnemucca, Elko and Fallon, why didn't someone else open up a store? More likely consumer demand wasn't enough to keep it going -- retail is highly competitive & generally trendy, and it takes a lot to make a success of it.
Come on Mitt...please continue to sink your money into making sure people in Timbucktwo can by their hick clothes! If the business was profitable, it would still be open. Profitable businesses don't close. I like to shop at IKEA and live in Las Vegas. Problem...I have to go to So Cal for an IKEA. Should IKEA open an unprofitable store in Las Vegas so that I can get my fix on cheap furniture, all the while losing thousands of dollars. This whole "for the good of the people" thing might work out well in Russia and China, but this is the United States of America folks. We worry about things like bottom lines, and actually making money. As another poster said, if the clothing store in BFE is such a good idea, round up the capital yourself and open it! Nobody is stopping you!
This is not a case of a business failing due to lack of business or other market forces. This is a case of taking a business with little debt and profitable, taking out huge loans to pay huge executive salaries, then abandoning the company overloaded with debt and walking away with 100's of millions from the unnecessary loans and pension funds. This is called vulture capitalism, no ethics whatsoever. Do we want a President with no ethics? Do we want a President that has bankrupted more companies then saving them?
"It kind of sounds like Mitt was involved in a pump and dump."
---------------
And a Nevada pump and dump at that, get busy spinning this Nevada state GOP..
:-)
Personally, I don't see these a smear campaign against the GOP. They are what GOP supporters point out., a look at reality in this country and how we practice capitalism.
It highlights the choice that we have to make for the future.
Is this the kind of capitalism that we want to continue? Do we always sacrifice the workers rather then profits? What is our most important asset for a viable economy and if businesses create unemployment in the name of profits, should they be be held more financially responsible rather than the tax payers supporting the unemployed while the executives reap millions on a failed company? Maybe, when a company fails the millions taken by management should be placed in a trust to cover the unemployment/ retraining costs of the employees to get them working again rather than padding the accounts for new luxuries for the execs?
It would seem that our current system is designed to minimize risk of failure for the owners/investors and pass the burden to the taxpayers at large. Maybe Bains strategy would have more focused on saving the investments they purchased and keeping people working and making a profit that way rather than sucking money out of the companies and then walking away to let them fail. If they would have had to put in trust all the millions they took out of the company after it failed to pay the costs of the unemployment they created.. I see a much different management view on their part.
Sure they may have saved a few companies, but why were they allowed to take millions away after others failed. Reaping a profit on a failure is what caused this financial crisis on wall street! Maybe we need to rethink how we reward failure and success.. currently it seems there is no difference between the two!
So lets reframe the question to how we practice capitalism rather than defend the current implementation.
Kind of interesting that Team Obama is attacking Mitt on closing companies and screwing over employees.
So what jobs were created with the "shovel ready" projects that cost the taxpayers how many billions?
How many jobs were lost at Solyndra after hundreds of millions of tax payer money was spent?
That's what I thought...selective memory about his own record.
Compare Mitt Romney's Bain Capital to Warren Buffett's Berkshire Hathaway. Buffett has bought 100's of companies over the decades, not one has gone bankrupt. Why? Buffett has intentions of making the company better, Romney has intentions of taking all he can then abandoning/bankrupting.
Really? There was a Stage store in Elko back then? I lived there then. I have never heard of it. Where was it? In someone's closet?
So the company was sold off in 99 and bankrupt 2 years later. Romney left Bain in 99. So the point of this story is?????
I am in Elko right now and from the looks of the Kmart and Walmart there is plenty of business to be had. Both stores have non western clothing.
Why isn't anybody mad at Obama for sucking up to the Chinese and the glorious supply chain into Walmart?
Just a stupid attack piece.
Dipstick, you are really a joker. The desperation of your message is really becoming more apparent.
Bain, a much smaller company compared to Berkshire Hathaway, focused on higher risk acquisitions, higher risk, higher return. Berkshire Hathaway focuses on lower risk but larger acquisitions. You're going to have a few higher risk acquisitions not pan out. Interesting how LVS didn't mention One of Bain's earliest and most notable ventures with Staples, Inc., the office supply retailer. The Bain funding enabled Staples to expand from one store in 1986 to over 2000 stores in 2011 with now over 90,000 employees. But no, LVS won't mention the success stories. Naw....
Interesting that RefNV wants to only talk about Staples, rather than the other businesses that Romney ran into the ground while making profits for his cronies. RefNV must not be proud of Romney's record at Ampad. Romney and Bain bought them, racked up 400 million in debt, then plunged the busines into bankruptcy... all to make a profit:
"The result: Ampad couldn't pay its debts and plunged into bankruptcy. Workers lost jobs and stockholders were left with worthless shares."
"Bain Capital, however, made money - and lots of it. The firm put just $5 million into the deal, but realized big returns in short order. In 1995, several months after shuttering a plant in Indiana and firing roughly 200 workers, Bain Capital borrowed more money to have Ampad buy yet another company, and pay Bain and its investors more than $60 million - in addition to fees for arranging the deal."
RefNV wants to ignore Romney's abysmal record on job creation... he also won't mention Romney's record as Governor of Massachusetts, where the state ranked 47th in job creation.
RefNV and Romney think the future of the United States lies in minimum wage jobs as cashiers at Staples or Dominos. Put down the pom poms, Ref.
"Corporations are people my friend" is what Romney believes. No real human being believes that crap and I for one will not vote for him!
Have fun Lon....
"Since inception it has invested in or acquired hundreds of companies including such notable companies as AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel."
"Romney is a Vampire in Mormon Clothing" under his leadership, Bain gutted companies, sucking them dry and leaving families in shambles without work or a means to provide for their children."
Yes, this is the goal of every venture capitalist, buy a company and close it down, not expand it. Buy it for millions then close it down. Makes a lot of sense Brandt.
This Romney has no morals. He is using the mormon wedge and trying to divide people and attack families. He pays 13 percent taxes and keeps his money in the Caymen Islands. These people have no values.
Word of caution to future business owners" If you maintain a philosophy of low debt, taking care of your employee's, fully funding a pension program, and are profitable. You are a takeover target.
Mitt Romney types see your philosophy as wrong and will 'maximize your company's potential' purely for their own profit. Vulture Capitalists like Mitt Romney see hidden wealth. How? Fire those employee's that built the business with you over decades. They are overpaid; bring in younger workers or offshore their jobs to the Chinese who are happy with an equivalent of $50 per month. Take out huge loans for unneeded expansion. Pay Mitt Romney millions as his fee for destroying your original philosophy.
Thanks to the Republicans pension 'reforms' in 2006, companies are allowed to 'borrow' from these once untouchable funds.
When 'quality' begins to suffer from underpaid/understaffed employees and customers start bailing, that's when Mitt abandons the company after looting all the gold. Now the company is saddled with unmanageable debt and some go on to succeed once Mitt is out of the picture, but most go bankrupt.
So Lynn what say you that Romney wasn't with Bain for over 2 years when this company went belly up???
Also since we're talking when and who, what say you about Solyndra? Or GE and GM not paying taxes? Or the fact that GE and GM employ more people that don't live in the US than do?
I hear crickets there Lynn and its still daytime.
Chuck,
Lynn Johnson always seems to be on the losing end of debates and this one is no exception. All Venture capitalist take high risk/high reward ventures. You win some and you lose some based on many factors including strength of competition, available funding, state of the economy, company debt load and changes in consumer spending habits. These factors you cannot control but Lynn thinks all companies can...you know.... Circuit City, CompUSA, etc.
Romney like many of us was hired to do a job and for him that job was making money for his firm and his shareholders. And guess what? Mitt did what he was hired to do very very well. Can we blame the guy? We can call it greed, capitalism, etc., but he basically did what he was hired for.
I'm not a big fan of Romney, but Mitt Romney actually has credibility on delivering success and actually executing his own plan. What has Obama delivered during his term? Hope? In fact, does Obama have any proven track of success in delivering to the people that has hired him in his career?
Mitt Romney wants to get rid of the middle class and give all power to the rich and the Mormon church. The mormons will will continue the culture wars and attack politics they are famous for.
Make no mistake, Romney is Not on our side.
Re Freeman: "Lynn Johnson always seems to be on the losing end of debates and this one is no exception"
So says you...thanks for the laugh.
MR_BOSTON: "Mitt Romney actually has credibility on delivering success and actually executing his own plan."
Mitt Romney has more failures than successes. It would be like recommending a surgeon that only killed half his patients, but hey he saved the other half.
Mitt Romney has no ethics, no long term vision, and no plan for America other than bringing back the tried and failed Bush policies.
I'm no fan of President Obama, but I'm not going to throw away 'average' for a much worse candidate, Mitt Romney. If Dr. Paul runs as an independent, there is a good chance he will get my vote.
Obama, unions and Occupiers can't produce jobs. If Americans prefer to have 12 to 14 million jobless Americans be permanent then vote Obama. If Americans prefer to have a $16 trillion dollar national debt balloon to $20 trillion then vote Obama. If Americans prefer deficits of $1.3 trillion per year then vote Obama. If Americans prefer to have a President who produces unserious Budgets like in 2011 & 2012 that did not get one single republican/democrat vote the last two years then vote Obama. If Americans prefer to have Class Warfare then vote Obama. If Americans prefer to have a tax plan that picks more winners/losers via the tax code then vote Obama. If Americans prefer to have a President who started his term with 60.9% of the population working but now has only 58.5% of the population working then vote Obama. If Americans prefer to have only 50% of college graduates to get jobs in their chosen field then vote Obama. If Americans prefer a President who is anti-business, anti-capitalist,anti-religion, anti-authority, anti-police, anti-bank, anti-oil, anti-wealth creation, anti-military/guns and anti-state rights then vote for Obama.
@Lynn: Still haven't answered my question. You have to have an answer.
I see you got most of the right wing talking points down RefNV. Great Job, you're a bold and intelligent follower. You forgot a couple though. If you want a dog-eater as President, vote for Obama. If you want a birth certificate forging non-American Muslim for president, vote for Obama. If you want a multi-million vacation taking First Lady, vote for Obama. If you want Bin Laden striking us with mushroom clouds, oops got carried away, dang Obama got him. Such fun regurgitating garbage, but you seem frustrated RefNV, hurry turn on Fox, link over to Drudge, and re-play your Rush Limbaugh recordings, your missing some of the big talking points.
Lynn,
Americans are ready for a change. Obama's had four years to get the economy going again and hasn't. There's just no excuses. No doubt, Obama is a nice guy however, he lacks the necessary skills and policies to grow our economy and create jobs.
At least Romney/Bain was risking their own money and time. Meanwhile, Obama wastes tax payer money and sends Solyndra into bankruptcy. That $500M sure could have been used to save American jobs instead of lose them. Stop wasting OUR money Obama! Millions of jobs have been lost under Obama because of his polices. And now all he can do is try and rip America apart through class warfare and uncouth attacks. Not voting for Obama this time for sure. He lost my vote.
Comment removed by moderator. Personal Attack
Chuck333, I don't normally read the 'untrusted' comments, as your comment will be deleted tomorrow and then the discussion becomes fragmented. Join the trusted commenters; half of them use fake identities anyways.
But, your question "So what say you about GM and GE not paying taxes and employing more people not living in the US than do?
And how about the fact that the company in question bankrupted 2 years after Romney left Bains employ."
I have no problem with GM and GE expanding into foreign markets and employing people in those markets. I do have a problem with shutting down American operations, moving them overseas, and shipping the products back to America. I buy 'Made in America' whenever possible. The majority of products GM and GE sell in America are made in America. Products they sell overseas are made overseas, have no problem with that.
As far as not paying taxes you are wrong. You see after Bush imploded our economy in 2008, all financial companies had HUGE losses (GE Capital and GMAC Finance). This created NOL (net operating loss) that the tax-code allows a carryover to following years until the entire loss is deducted. Compute their taxes the way big oil does: they pay payroll tax, their employees pay taxes, excise taxes on energy, etc. GE also received 'Green Energy Credits' that reduced their liability. To say they pay no taxes is absolutely false. I have a problem with any profitable company not paying their fair share of taxes. Just like I have a problem with Romney paying 13.9% on 29 million of income. His tax rate is lower than mine, yet I made nowhere near what he did.
If you had read my explanation of how Vulture Capitalists operate, you would have seen the answer to your question about a company filing bankruptcy 2 years after Romney left...he saddled them with a huge debt load, that finally sunk them 2 years after Romney left.
Just for the record, the Romney's paid $6.2 million in taxes and gave $7 million to charity. My guess is that the Romney's gave this year more in taxes than Lynn will in her lifetime. And yes, she sounds envious.....why else would one be upset over someone giving $6.2 million in taxes? Is Lynn upset with Jennifer Aniston looking so hot too? Maybe Aniston should have her clothes and make-up taken away. This might please Lynn too.
Dip,
I'm sure Lynn thinks Obama is more American having given his $162,074 thousand in taxes versus Romney who paid $6.2 million.
Just for the record:
"In 2010, Romney made $21.7 million, on which he gave nearly $3 million in taxes at an effective tax rate of 13.9 percent. In 2011, the former governor earned a similar amount, and will pay more than $3.2 million in taxes at a rate of 15.3 percent." http://abcnews.go.com/Politics/OTUS/mitt...
"The returns also showed that Romney and his wife, Ann, gave away $3 million in charitable donations in 2010, including $1.5 million to the Mormon church. In the past two years, Romney and his wife, Ann, gave just a little bit less, about 10 percent, to the Church of Latter Day Saints."
I apologize for misrepresenting his 2010 income as 29 million, it was 21.7 million.
"Mitt Romney offered a partial snapshot of his vast personal fortune late Monday, disclosing income of $21.7 million in 2010 and $20.9 million last year -- virtually all of it profits, dividends or interest from investments.
None came from wages, the primary source of income for most Americans. Instead, Romney and his wife, Ann, collected millions in capital gains from a profusion of investments, as well as stock dividends and interest payments.The couple gave away $7 million in charitable contributions over the past two years, including at least $4.1 million to the Church of Jesus Christ of Latter-day Saints. Romney's family has for generations been among the Mormon Church's most prominent members.
The Romneys sent somewhat less to Washington over that period, paying an estimated $6.2 million in federal income taxes. According to his 2010 return, Romney paid about $3 million to the IRS, for an effective tax rate of 13.9 percent."
http://www.washingtonpost.com/politics/m...
I love how Republicans try to add sales taxes, property taxes, state income taxes, federal excise taxes, etc. when talking about the federal income taxes they pay.
But, then they turn around and make a false claim that half of Americans pay no taxes, when in fact they pay sales taxes, property taxes, federal excise taxes, federal payroll taxes, social security taxes, Medicare taxes, etc.
We were discussing federal income taxes, and then they have to pad what they pay because their tax rates are lower than the vast majority of the middle class. Well add in ALL taxes I paid in 2010 and my tax rate was more than double Romney's. Am I envious of Romney's wealth, not at all, am I envious of Romney's effective tax rate, absolutely. So who is playing class warfare"the Republicans.
By the way RefNV, Romney's income is mostly 'carried interest' defined as "Carried interest or carry, in finance, specifically in alternative investments (i.e., private equity and hedge funds), is a share of the profits of an investment or investment fund that is paid to the investment manager in excess of the amount that the manager contributes to the partnership."
"I love how Republicans try to add sales taxes, property taxes, state income taxes, federal excise taxes, etc. when talking about the federal income taxes they pay."
Lynn, can you site some links as examples? Typically, it's liberals who claim sales, property and state taxes in their argument that the 50% who do not pay federal taxes pay other taxes. I can provide two or three links of liberal posters doing this on LVS articles.
Lynn, the top 1% of wage earners earn 17% of all US income however, they pay 37% of the total federal income taxes. Some think that is unfair.
http://www.heritage.org/federalbudget/to...
Lynn, unlike wages which have no risk to the wage earner, an investment is a risk, an investor could lose part or all of his/her money. Most believe that that gains on investment should be taxed at a lower rate for this reason. If the tax rate is too high then the risk of losing your money is not worth it.
Below is a Youtube video of Obama stating he would raise the capital gains tax rate even though historically raising capital gains tax rates have lowered tax revenue receipts coming into the federal government.
http://www.youtube.com/watch?v=__L5DOxgh...
Keep sending those numbers Refnv. If they're accurate I'm sure most posters would like the information.
Romney does not have an honest bone in his body.