Ellett Brothers, until a couple of years ago, the largest firearms distributor, has filed for bankruptcy. They are the second major distributor to fail in the last couple of years. The first was Acusport. EB had bought Acusport's physical assets, especially their automated warehouse. I've noticed the last several months that they never had anything in stock.
It's the kind of B.S. that occurs when you get corporate "Brain Trusts" comprised solely of MBA bean-counters running corporations. All they care about is how to make the stockholders happy so they can get bigger bonuses. They don't give a scheit about the customers nor their employees.
Borrow money and then just give it to investors to make the dividends larger and thus increase stock prices, lining the corporate "investment group" pockets? Typical behavior, IME.
IMHO, MBA bean-counters should not be allowed to run corporations. They should be advisors. Nothing more. They focus on "inward-facing" policies, instead of "outward facing" ones, and forget that, irrespective of how they make money, they are still in the "people business". I see it every day and have suffered the consequences more than once.
Everyone does, but they don't recognize what they are experiencing. Experience poor "customer service" at a big box store such as Lowe's? Thank the corporate MBA bean-counters who emphasize cutting costs at the expense of hiring and retaining good employees. Thank the store managers who follow those rules so they can get bigger bonuses by keeping employee costs down.
When you watch "investment groups" (invariably run by same MBA bean-counters) buying businesses such as Ellett Brothers, notice that they really don't GAS about the people working there, nor the customer base. All they want is the money the company can make for them and the first thing they do is "reorganize", thus destroying the institutional system that created such a profitable business in the first place. Quality is most often sacrificed and quantity is substituted to keep the profit margins acceptable.
Off my soapbox now, it's time to get back out in the desert.
Ed
"Not in an open forum, where truth has less value than opinions, where all opinions are equally welcome regardless of their origins, rationale, inanity, or truth, where opinions are neither of equal value nor decisive." Ken Howell
The definition of how to run an old profitable company into the ground in short time.
Geno
The desert is a true treasure for him who seeks refuge from men and the evil of men. In it is contentment In it is death and all you seek (Quoted from "The Bleeding of the Stone" Ibrahim Al-Koni)
Yep... got bought out and then leveraged the company to the hilt and instead of putting the borrowed money in the company, it went into the big wig's pockets... disgraceful.
"If there are no dogs in Heaven, then when I die, I want to go where they went" Will Rogers
Singer sewing machine is a perfect example, when taken over I believe they had over a 100 mil in cash when cut lose were something like a 120+mil in the hole. Somebody got rich!! Cheers NC
don't judge until you have walked a mile in other persons' moccasins' SUM QUOD SUM........HOMINEM TE ESSE MEMENTO
The desert is a true treasure for him who seeks refuge from men and the evil of men. In it is contentment In it is death and all you seek (Quoted from "The Bleeding of the Stone" Ibrahim Al-Koni)
Is what is being done in these cases illegal or just playing the system to make money?
That would likely depend on who's corporate (read expensive) lawyers are able to convince the judge in the case to take their side.
Geno
PS, after all, with them lawyer types "It depends on what the meaning of the word "is" is"
The desert is a true treasure for him who seeks refuge from men and the evil of men. In it is contentment In it is death and all you seek (Quoted from "The Bleeding of the Stone" Ibrahim Al-Koni)
Looks like another one of those deals where the parasites get into the drivers seat, run the company into the ground without breaking any laws, and after lining their pockets they walk away fat and happy. Welcome to the shady side of corporate America.
Every distributor (and manufacturer) bet on the wrong side in the 2016 election. The manufacturers were running 24/7/365 and the distributors were ordering like crazy. The one article said that EB had to clearance guns at low prices because of too much stock but I never saw it. I am on their site on an almost daily basis. It seems the problem wasn't the overstock but the fact that money that should have gone towards paying the bills was being syphoned off.
Got friends that worked at Ellett and Acusport from my days in the gun biz. Bad things happen to companies bought out by private equity groups...ought to be illegal.
You only live once, but...if you do it right, once is enough.
The definition of how to run an old profitable company into the ground in short time.
Geno
This ^^^^^^^
Originally Posted by Godogs57
Got friends that worked at Ellett and Acusport from my days in the gun biz. Bad things happen to companies bought out by private equity groups...ought to be illegal.
And this ^^^^^^^
Unfortunately, totally legal... Last PE owned company that I worked for, the PE group would call the Controller at month end and tell her how much money to send to the PE firm. Afterwards, she and the other exec's would play the game of "Which suppliers do we pay this month?"...
Will suck the life and morale right out of an organization...
