Anyone else try their best not to be a customer to PE backed businesses?
I say this as a first year assoc but I’ve been this way since graduating college. Whenever I go out to eat, buy drinks or skincare products, clothing, etc I always research if it is PE backed and avoid at all costs for family businesses instead. I am too aware of the tangible decrease in quality and attention / love that goes in to products backed by PE. Even goes for my gym chain.z I just feel like PE backed businesses are too good at fucking the customers and most people are blind to it. Maybe this is normal for people who see how the shit is made lol
Generally agree and do the same - although lifetime is a decent product in some geos (Boston suburbs for eg)
fashion: Reformation (Permira) has horrendous price for shitty qualities
gym: Equinox tries to be luxurious but their customers have some of the most disgusting behaviors, their group classes and facials are weak
Yes! There's a local sushi restaurant where I live, it has always been pretty high quality, which was recently bought by a PE firm. Ever since, portion sizes have decreased, and it's become obvious they are only looking for profit. Went with my dad the other day and he asked for a few extra sauces, the total was already $158, and they told him he has to pay for more sauces - even though there were only 3 sauces for 4 people. He lost his shit.
Omg same. Went to Khalid the street meat vendor the other day and the man behind the grill was gone and replaced by a young HBS-type in John Lobb loafers. I knew immediately it had been LBO’d by KKR. My kebab was still tasty, but when I asked for a napkin he had the audacity to hand me a single napkin.
I used the other ones to prep for the LBO math on the deal
MBB consultant here. Doesn't only apply to PE owned shops though. Since working this job I always say I can tell you when a business has been optimized by some excel monkey in the background cutting costs bottom-up.
I realize that most in airport lounges (e.g., Lufthansa). You can just observe how every freaking thing that is offered there has been optimized to the max by some analysis in the background that cutting down to the cheapest form of salad will drive xxxK COGS reduction on average.
I swear I can see this. Even when ordering food from restaurants.
What is really beautiful is when you truly see the opposite. I was in Hawaii recently and could not understand the structure at one of the best shaved ice places I’ve ever been to. Or when I go to a small restaurant or boutique clothing shop and get a degree of quality and service that surely does not make economical sense but they’re relying on building a relationship, etc
Something honest about an MBB guy being annoyed at how business-ified the airport lounges are eh
Interesting point about Lufthansa.
I was recently on transatlantic Lufthansa flight, followed by flight within Germany on Lufthansa and then United flight back to US.
The first Lufthansa flight felt as if I were flying Space Available on US Air Force cargo plane. The second Lufthansa flight felt as if ICE were deporting me to Central America. Only United flight let me feel like normal human being.
I will do my best to avoid Lufthansa in the future. Management has stripped away all the amenities that are standard on long haul international flights. And domestic Lufthansa felt like Ryan Air. When I said yes to flight attendant’s offer of bottled water, she asked for 3 euros.
That is the norm of flying in Europe these days. Every airline is benchmarking against Ryan Air/Easyjet/Wizz.
Many things I don't really care but some I'm hyperfocused on. Prime example are things that are HC-related such as vets or dentists.
As a healthcare Rx guy, 100% same
Any doctor/vet I go to, if I don't know for sure if it's PE backed I straight up ask who owns your practice. Same for day care, which is heavily PE owned these days outside of religion based day cares.
Being hospital system owned is equally as bad as PE sometimes. Very hard to find founder owned clinicians which makes me sad.
Same folks buying hospitals are buying medical practices as way to steer business into those hospitals. In big cities, independent medical practices are becoming increasingly rare. The ones staying independent tend to make a point to tell patients they’re still physician-owned.
100% agree. PE owned dentists will rip off your teeth for money. No way. And I work in PE...
Sort of, UK based, but try support / go to founder owned single practice dentist, local pharmacy, shopping on other sites than Amazon (appreciate not PE).
When it is PE / VC backed, I try fuck it as much as possible - like ClassPass (cancelling constantly, backed by Vista), or using coupons at Boots (Sycamore backed, but will be divested) or during COVID used as many free / sign-ups for things like Gorillas (fast delivery groceries).
We have bought a lot of businesses and IMPROVED quality massively. I don't think PE = shit
ya totally bro
Incredibly asinine comment from an anon coward, nice.
Ok, how?
Quality of cash flows!
Verticalization + sourcing more aggressively. A lot of the time in LMM nobody has looked at supplier performance or suppliers in general in a long long time...
Name one
I'm in the opposite boat - I exclusively support PE-backed companies. For food I'll typically get Panera for breakfast, Subway for lunch, Jersey Mike's for dinner, and Krispy Kreme for dessert. I also try to drink 16 cups of Tropicana orange juice daily.
It's interesting seeing the tides shift increasingly against PE lately.
Whenever I see auntie annie's with Cinnabon in the same store.... i love roark,..
Eh depends on the franchise for some of the PE backed businesses. The local food chains where I live is great, very fresh and still great quality even post PE acquisition.
My gym is PE-backed (locations across the country) and it's chronically understaffed and machines are broken. People are vaping in between sets and never asked to stop / get kicked out. But it's the cheapest 'decent' option near me because I don't want to get a Planet Fitness membership.
Most Planet Fitness locations are PE backed
100% agree with OP. I almost always avoid the PE-owned businesses. Just don't want to support their practices.
Best example within my friend group is skiing, crazy price increase over past 5 years and worse experience.
Hey cmon KSL needs the money
I had to get my water heater replaced. The prices of these PE-backed HVAC platforms were insane. Eventually found a mom-and-pop shop to replace it for half the price
Gonna throw in Panera here - used to be a really good lunch option (somewhat expensive but occasionally worth it) a decade ago, now it’s bland frozen food and I sure ain’t paying $6 for a single muffin
That bread bowl broccoli and Mac still slaps. My friend who used to work there would bring loads of free bread to lunch. Good times.
This is like trying to boycott Israel. It may be a worthwhile thing to do, but it isn't really possible
Maybe hard in the US, pretty easy in Europe
I guess we can start with some basics.
(1) How do you boycott AMD, Nvidia, and Intel? I am genuinely asking you. How do you do that? How do you make sure that the data centers on the back end of the websites you use don't use AMD, Nvidia, and Intel products?
In more ways than one eh
Get ready for the mods to delete your post. Here’s come the gestappo.
When did this site become so heavily censored. As if anyone really cares about WSO anyways
No my decision making is based purely on product or service delivered and I don’t care about their capital structure unless it’s a long term service and they’re in financial distress
I work in healthcare PE and only go to university affiliated healthcare for myself. PE is terrible for healthcare services
I specifically avoid Vail ($MTN) ski resorts for this reason. They have squeezed every last dollar out of the ski industry by overcrowding the resorts and failing to maintain basic safety standards.
PE backed and usually the business sits in a fund. And they are rigid on headcount and g&a. My experience was the businesses are run by spreadsheets and somewhat inflexible because PE understands corporate structures and leverage ratios etc but lots of time misses the core of the business if they don’t have a seasoned operator. They end up missing the shifts or drivers going on in the industry and can be too slow to react or not allocate capital efficiently because the business is only understood from a balance sheet perspective.
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