Financialised Private Equity Finance and the Debt Gamble: The Case of Toys R Us

Jamie Morgan, Muhammad Ali Nasir

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


In this paper, we pursue a financialisation line of argument exploring the specific features of private equity finance, with a focus on the activity undertaken at scale by the largest management groups or firms. The largest private equity firms wield considerable resources, affect ownership patterns and have the capacity to acquire literally any company. What they do matters. The bankruptcy of Toys R Us and the more general ‘crisis of retail’ illustrate a ‘debt gamble’. A company’s capital structure is radically restructured and equity is reduced and replaced by debt. The gamble is that there will be no change to the external environment that the GP cannot adequately adjust to and that the GP will in fact be able to maintain debt servicing. Although bankruptcy is a ‘worse case’, we contend that from a financialisation perspective, there are a whole set of attendant issues.

Original languageEnglish
Pages (from-to)455-471
Number of pages17
JournalNew Political Economy
Issue number3
Early online date26 Jun 2020
Publication statusPublished - 1 Mar 2021
Externally publishedYes


Dive into the research topics of 'Financialised Private Equity Finance and the Debt Gamble: The Case of Toys R Us'. Together they form a unique fingerprint.

Cite this