President Obama's re-election campaign pressed its attack on Mitt Romney as a cold-hearted capitalist Tuesday by saying that he helped drive into bankruptcy a chain of department stores that used to be located in 26 Ohio cities, including Bowling Green.
State Democratic Chairman Chris Redfern and national Obama campaign co-chair Ted Strickland said that Bain Capital in the 1980s bought up small clothing stores and organized them into Stage Stores, expanded the company, borrowed heavily against it with junk bonds, and sold its remaining shares at a profit in 1997, three years before the company went bankrupt in 2000.
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More than 5,000 workers lost jobs.
"Mitt Romney's business record isn't one of growing companies and creating jobs. It's one of broken promises and shattered dreams for thousands of hardworking Americans," Mr. Strickland said in a telephone conference call with Mr. Redfern.
"If you think that Romney's slash and burn tactics didn't affect Ohio, think again. They hurt our state's economy, and cost Ohioans their jobs," Mr. Redfern said.
The Romney campaign responded that Stage Stores Inc. was successful under Bain Capital's leadership.
"We welcome a discussion about jobs and the economy," said Romney Ohio spokesman Christopher Maloney.
The Obama campaign said there were 26 Stage Stores in Ohio, including in Fostoria, Port Clinton, Napoleon, Fremont, Van Wert, Bryan, and Bowling Green.
The campaign said after forming Stage Stores, Bain took the company on an expensive growth binge, increasing from 257 stores in 13 states to 607 stores in 24 states. The company went public on the New York stock exchange in 1996.
Bain used high-risk junk bonds to borrow against the company from Drexel Burnham Lambert, which, had already been sued by the Securities and Exchange Commission over insider trading.
Bain sold its remaining shares in 1997 for as much as $52 per share, the Obama campaign said.
In less than a year, the stock fell by more than 58 percent. Stage declared bankruptcy in 2000, resulting in 5,795 workers at Stage Stores across the country losing their jobs, the Obama campaign said, quoting news accounts, while 9,892 remained employed.
Quoting the Boston Globe, the Obama campaign said Bain made $180 million off a $10 million investment.
Since its reorganization in bankruptcy court, Stage has rebounded, according to its Web site, to more than 800 stores in 40 states operating under the names Bealls, Goody's, Palais Royal, Peebles, and Stage. Five of those stores are in Ohio, including Peebles in Bryan.
The company's stock was $15.63 per share Tuesday on the New York Stock Exchange.
According to Securities and Exchange Commission documents provided by the Romney campaign, Bain owned 18.2 percent of the company after it went public in 1996. Bain sold its shares for $34.87 in 1997, nine months before the shares peaked at $53.75, those documents said.
Mr. Romney, who co-founded Bain in 1984, left the company in February, 1999, to take over running the Salt Lake City Olympics.
One of the chains Stage Stores bought in 1996 was the Bowling Green-based Uhlman Co., a formerly family-owned business that at one time had 40 stores in Ohio, Michigan, and Indiana and 1,000 employees. In 2001, Peebles Inc., based in Virginia, acquired and reopened Stage stores in Tiffin, Fremont, and Van Wert.
The Stage story is similar to the Obama campaign's accusation that Bain Capital under Mr. Romney took over a Kansas City steel company and saddled it with debt to pay dividends and fees. It went out of business, depriving workers of jobs and retirements.
"The bottom line here is that Stage workers lost out because Mitt Romney believes it was OK to load companies up with debt, put thousands out of work, and bankrupt companies — all so a handful of investors can make a fortune. The values and lessons Romney learned as a corporate-buyout specialist aren't the ones we want in the White House," Mr. Redfern said.
Romney spokesman Mr. Maloney said Mr. Romney's tenure at Bain, and Bain's control of Stage Stores, ended "long before the stores were closed and bankruptcy was declared.
"President Obama can't come close to matching the many years of experience that Mitt Romney has as a private businessman so he has chosen to attack the free market. Americans deserve a leader who understands how the economy works," Mr. Maloney said.
Democratic Vice President Joe Biden will tout the Obama Administration record on manufacturing and the auto industry in a two-day campaign trip to Ohio this week.
The vice president will tour M-7 Technologies, a factory for advanced manufacturing, in Youngstown today and visit a family-owned Chevrolet car dealership in Martins Ferry on Thursday.
Contact Tom Troy at firstname.lastname@example.org or 419-724-6058.