My e-mail inbox has been filled with the standard array of advertising this holiday season, with the usual entreaties from my favorite merchants to sample their wares. Among those, one company–Bills Khakis–seemed a bit more insistent.
The discounts being offered–anywhere from 50 to 70 percent–were enticing. But why was Bills, traditionally impervious to discounts of this magnitude, offering such steep price reductions?
Then, a few days ago, another e-mail arrived, this one putatively from the virtual pen of Bill Khakis founder Bill Thomas. In this e-mail, he apologized for recent customer service lapses and offered yet another discount on top of the already substantial reductions.
Not having purchased anything for Bills in a few months, I wasn’t privy to the customer service issues. But apparently they were so significant that it prompted an e-mail from Bill Thomas himself.
A little bit of Internet sleuthing revealed the reason.
Bills Khakis–in the hands of Thomas for the past quarter century–has apparently been acquired by Source Capital LLC, a private equity firm.
The Internet rumor mill has been rife with speculation. Is the company simply girding itself for an ambitious relaunch, with an infusion of new capital? Or is the seeming liquidation a harbinger of the company’s demise, with Source Capital trying to squeeze as much juice as possible out of a rotting fruit?
Apparently, Source Capital invested in Bills about a year and a half back, providing financial backing to expand the company’s product line. When Bills could not service that debt, its investor partner swooped in and is selling off excess inventory to recoup what it can of its original investment.
Some Internet observers, claiming inside knowledge, have suggested that the company’s staff has been reduced to a skeleton crew, struggling to fulfill orders from dwindling inventory.
Regardless, it’s difficult to see how this ends well for Bills Khakis. Either the priest is administering the last rites or the company will reemerge some time next year in the hands of a private equity firm, whose commitment to American manufacturing is questionable.