The Payless Inc. shoe company was already on its way to becoming another retailer felled by the internet when the private equity guys showed up and acquired it in 2012. Golden Gate Capital and Blum Capital weren't able to turn Payless around. But the buyout firms still made out handsomely. Payless is closing hundreds of stores as it struggles to repay $665 million of debt. Golden Gate and Blum have nonetheless turned a profit on the deal by having Payless borrow millions in the financial markets, a move that's pushing the company to the brink. The firms have collected $350 million from Payless through debt-funded special dividends. Golden Gate and Payless declined to comment, and Blum didn't respond to requests.
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