How could Bain not predict that Amazon would dominate toy sells?
Toys R Us made a 10 year deal with Amazon to be the exclusuve toy seller in 1999, that had already fallen apart by 2005. Amazon was already the top online toy reteller by then.
As far as debtors being "screwed", hopefully they are both diversified enough and demanded enough of a risk premium for them to at least break even on their entire portfolio of loans.
"Fallen apart" is a nice way to put it. Another way to put it is that Amazon duped Toy's R Us into a terrible deal, learned everything they could about the toy market, then dumped them and violated their contract knowing that regardless of proceeding lawsuits (which Toys won) they would dominate the online toy space in the future. Everybody here blaming Bain, when the reality is that Toy R Us got thoroughly outplayed in the online space and never learned their lesson.
These were supposedly smart business people. You are always in danger when you outsource something that should be your core competency.
Apple learned that lesson a decade ago. If you look at the post Steve Jobs Apple, they brought more in house - retail, chip design, software, and rumors are they are trying to bring screen design more in house. Anything else, they try desperately not to depend on one supplier - commoditizing their compliments. (https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/)
Toys R Us made a 10 year deal with Amazon to be the exclusuve toy seller in 1999, that had already fallen apart by 2005. Amazon was already the top online toy reteller by then. As far as debtors being "screwed", hopefully they are both diversified enough and demanded enough of a risk premium for them to at least break even on their entire portfolio of loans.
https://qz.com/1080389/a-dot-com-era-deal-with-amazon-marked...