Mitt Romney's Bain Capital Investments: 5 of the Best
Though chains such as East Coast-based Dick's Sporting Goods would become just as successful and prolific through the use of the same model, The Sports Authority is an example of just what a well-funded bit of American ingenuity can accomplish if given the chance.
Brookstone
The Sharper Image went from a gadget store to a logo on iPod docks, shavers and luggage found at Macy's , JCPenney and Bed, Bath & Beyond . Brookstone morphed from a gadget store competing with the Sharper Image to one competing with high-end Hammacher Schlemmer and its $13,000 motorized monocycle. Guess who did something right?
When Romney and Bain took over Brookstone in 1991, it wasn't to change the products but to change the model for selling them: Brookstone was relying largely on stores and catalogs to sell other manufacturers' Swiss Army knives and gadgets.
Romney and Bain replaced Brookstone's CEO in 1993, began shifting the balance of stock to Brookstone-branded items, making the store and catalog lineups look more alike and adding store-exclusive items to drive traffic.
The store added kiosks in malls that already had Brookstone outlets and began shifting more catalog content onto its website in 1996. By 2000, more than 60% of Brookstone's sales came from its home-branded products. The focus shifted from gifts to somewhat more practical items such as hair dryers and barbecue forks.
That approach drove revenue, kept the customers coming and, eventually, helped Brookstone survive while Sharper Image declared bankruptcy.
Today, Brookstone still has 300 stores but relies on that same multipronged approach of Web and catalog service to not only stay afloat but to boost sales 8.8% and push same-store sales 6.7% last year.
Those tweaks made during the Bain years didn't always hold, as Brookstone saw big declines in 2009, but they set a template for how the company could survive a changing climate, streamline and remain relevant — if only somewhat less indebted.
Doing the same to certain elements of the federal government, if not the whole thing, seems like a prerequisite for any serious GOP candidate.
Sealy
Sometimes you just want a nice, stable place to rest your head at night. For many years, regardless of its mattress quality, Sealy was not that place.
The 130-year-old company fought off bankruptcy during the Great Depression, went through its first leveraged buyout in 1989 and eventually was bought out by Romney, Bain and Sealy's executive team in 1997.
The company already had a 23% share of the $4 billion mattress market and Bain looked to solidify that position by going with a "lean" manufacturing process that makes all parts of the mattress in a constant flow rather than in batches, producing only the number customers order and slicing inventory.
The company redesigned its core mattress, focused on the high end and watched earnings jump to $168 million from $112 million in three years.
Bain made back more than five times its initial $830 million investment when it sold Sealy to KKR in 2004, but Sealy went into its 2006 IPO as a company ahead of its time.
When the recession hit in 2009, Sealy's "lean" approach kept it from having a ton of increasingly worthless inventory laying around and protected it from the losses beseting competitors such as Simmons, which found itself leveraged to the hilt and filed for Chapter 11 bankruptcy in late 2009.
Instead of laying off its nearly 5,000 full-time workers at 25 bedding plants, Sealy was able to get by through attrition and the trimming of its temporary work force.
If an aspiring politician can not only protect an American institution in the short term but recession-proof it for the years that follow, that's not a bad scenario to be caught in bed with.
Dominos Pizza
Domino's had only one owner before Romney and Bain bought 93% of the company in 1998, and Tom Monaghan knew how to play to a conservative base.
Monaghan has used a large slice of his pizza profits to support the Catholic Church and fund various forms of Catholic philanthropy, including his Thomas More Law Center, Ave Maria Foundation, Ave Maria Mutual Fund Catholic investments, Ave Maria University and School of Law in Florida and the Catholic-minded town of Ave Maria, Fla.
Monaghan's views are in line with those of the church and have been unwaveringly anti-abortion, anti-gay marriage and anti-secular since owning the pizza chain; his money has helped push for like-minded candidates and Supreme Court justices.
Romney hasn't always shared Monaghan's views — he was pro-choice until 2005 — and showed no signs that they played a role in the buyout, but having more than a pizza company as a similar interest doesn't hurt Romney's conservative credentials.
Installing David Brandon as chain CEO wasn't a shabby move either, as Brandon oversaw the Domino's IPO in 2004, tweaked the company's ordering system with online ordering and a "pizza tracker" and set into motion the 2009 pizza revamp that helped boost revenues 11.9%, to $1.6 billion.
Though Romney left Bain in 1999 and was well out of the picture by the time any of this took place, he showed the ability to appoint personnel who could help bring about change and make deals with partners reflecting the values of his key constituencies.
