Poor old Bain Capital hasn’t had any easy time of it PR-wise lately, what with the whole Mitt Romney thing. Although the would-have-been President wasn’t actually working for Bain at the time, the firm nonetheless found itself targeted by a series of attack ads in which it was accused of causing pretty much every bad thing in the history of the United States, from the Civil War through to Hurricane Sandy.
So what better way to reboot its image than by buying one of America’s worthiest companies? In August, it emerged that Bain had trumped competition from various other private equity firms to buy a 50 percent stake in TOMS Shoes, in a deal that values the US ‘ethical footwear’ business at about $625 million.
If you’re not familiar with TOMS, it’s not just your average purveyor of average ‘sneakers’. Its pioneering ‘one for one’ model (which has since been widely copied) involves giving away one pair of shoes to the needy for world for every pair it sells. It’s just started doing the same thing with glasses, too, and a similar thing with coffee (though in the latter case, the donation is a week of clean water, the needy having relatively little need for a bag of blended Guatemalan Java).
In other words, TOMS – and its too-cool-for-school 37-year-old founder Blake Mycoskie, aka Chief Shoe Giver – have just about the perfect PR credentials for an organisation still seen in some (unhinged) quarters as being one step removed from the Evil Empire.
But there is a flipside to all this, of course. Hopefully this tie-up will allow TOMS to leverage Bain’s outstanding retail expertise, expedite further category expansion, and all that sort of thing. And it seems pleasingly appropriate for a firm that’s taken such a prominent kicking to buy a prominent shoemaker.
Still, one can’t help but be a bit nervous about what might happen if things don’t go to plan.
No private equity firm wants to be known as an ethical shoe killer – but if it happens on Bain’s watch, it may want to think about relocating to Nanjing.