KKR, Bain Capital Create $20 Million TRU Financial Assistance Fund
KKR & Co. Inc. and Bain Capital, L.P. announced the establishment of the TRU Financial Assistance Fund to allocate and distribute funds to certain former Toys “R” Us employees in the U.S. business who lost their jobs as a result of the severe disruption in the retail industry and the liquidation of the business. KKR and Bain Capital have each committed $10 million to the fund, which has the flexibility to allow other interested parties to contribute.
The firms have appointed Kenneth Feinberg and Camille Biros, experts in designing and administering unique programs such as the 9/11 Fund, BP Oil Spill Fund, GM Ignition Switch Compensation Fund, OneFund Boston, and the OneOrlando Fund. Most recently, they served as fund administrators for various Roman Catholic Dioceses resolving claims of sexual abuse by clergy. They will serve as independent administrators of the fund, responsible for the independent management and distribution of all proceeds.
The Draft Protocol is the result of a collaborative effort involving KKR, Bain Capital, the Independent Administrators, and former employees of Toys “R” Us.
The following information was used to develop the distribution methodology:
Available Company data including:
- historic earnings
- hours worked
- tenure using hire/termination dates
Toys “R” Us termination/employment policies
Input from former Toys ‘R’ Us employees
The following components were used to determine the proposed draft eligibility and payment amounts:
- Tenure: Must have at least one year of tenure
- Earnings: Must have no more than $110,000 in Annual Income
- Minimum Earnings: Must have no less than $5,000 in Annual Income
- Termination/Employment Guidelines in the Toys “R” Us Plan
The parameters and the complete calculation methodology are described in the Draft Protocol, which has been posted on the Fund’s website at www.TRUFinancialAssistanceFund.com.
There will be a two-week period for all interested parties to comment on the terms and conditions of the Draft Protocol. After these comments are considered and evaluated by the Independent Administrators, the Final Protocol outlining final terms and conditions will be made public. The claims process is expected to launch on December 15. It is anticipated that distributions will begin shortly thereafter, and would be completed on or about April 30, 2019.
Feinberg and Biros emphasized that, with the exception of providing the initial contributions, and providing initial input concerning the program’s terms and conditions, neither KKR nor Bain Capital will have any role in the administration of the Fund or the distribution of the monies. All future announcements related to the fund will be made by Feinberg and Biros.
The TRU Financial Assistance Fund does not include any Limited Partner capital from either firm.
Consumers Expected to Spend More Online Black Friday, Says NPD
Analysis from NPD’s Checkout, a receipt mining service, shows the average amount spent online per buyer on Thanksgiving Day and Black Friday 2017 exceeded what was spent at brick-and-mortar stores on the same days by more than 20 percent.
“Online shopping drives significant holiday spending over those peak days, particularly among the early birds,” said Marshal Cohen, chief industry advisor, The NPD Group. “Some traditions remain, but more and more consumers are forgoing the Black Friday trip to the mall and doing their shopping online over more days.”
Last year, Cyber Monday fell behind Black Friday in terms of the average spend per buyer online, but remains a critical day for e-commerce. Later in the season, as online shopping becomes less practical, consumers will return to the stores for those last-minute gifts. There will be more time to shop the weekend before Christmas this year with the holiday falling on a Tuesday. This means Super Saturday will be back to claim its distinction as a key day for in-store activity.
The importance of each holiday shopping day differs when looking at specific industries. Black Friday was the most important day of 2017 for in-store apparel spending per buyer, while Thanksgiving was the dominant day for housewares and technology products. At the same time, only apparel saw any of the traditional holiday shopping days capture the same level of impact with Black Friday accounting for the second highest average e-commerce spend per buyer. Footwear was the biggest outlier, with each of the primary holiday shopping days falling outside of the top 10 for the industry in 2017.
Retailers Ready for Thanksgiving Weekend
Retailers are preparing for one of their biggest weekends of the year as an estimated 164 million people are already planning to go shopping Thanksgiving Day through Cyber Monday, according to the annual survey by the National Retail Federation and Prosper Insights & Analytics.
“Whether it’s heading to the stores after finishing their turkey or going online on Cyber Monday, consumers will be shopping all weekend and retailers will be ready to meet the demand,” NRF President and CEO Matthew Shay says. “Retail is a vibrant, dynamic and competitive industry, but one thing is certain – consumers are the winners no matter which day or which way they shop.”
The survey found that of those planning to shop during the long holiday weekend 21 percent (34 million) plan to shop on Thanksgiving Day, but Black Friday will remain the busiest day with 71 percent (116 million) planning to shop. Forty-one percent (67 million) are expected to shop on Small Business Saturday, and 78 percent of those say they will do so specifically to support small businesses. On Sunday, 20 percent (32 million) are expected to shop. The shopping weekend will wrap up on Cyber Monday, when 46 percent (75 million) are expected to take advantage of online bargains.
Of those shopping this year, 65 percent said they are doing so to take advantage of deals and promotions retailers will offer, while 26 percent cited the tradition of shopping over Thanksgiving weekend and 23 percent said it is something to do over the holiday weekend and the same number said it is when they start their holiday shopping.
The survey, which asked 7,516 consumers about their shopping plans, was conducted October 29-November 7 and has a margin of error of plus or minus 1.2 percentage points.