Watanabe for the debt he owes the casino. This month, local prosecutors in Las Vegas dropped criminal charges against Mr. He claimed that Harrah’s Entertainment had provided him with prescription pain medication and alcohol that he claims fueled his gambling spree. Terry Watanabe, who has not had any investment in Oriental Trading since 2006, has struggled in recent years. In January 2000, Brentwood Associates, a Los Angeles private equity firm, took a stake in Oriental Trading for an undisclosed amount. Later, his son, Terry, took over the business and increased sales by shipping catalogs to church groups, schools and the offices of pediatricians. He built the business one Kewpie doll at a time, selling his cheap imports to traveling carnivals from a trailer hooked up to the family car, according to an article in Forbes magazine. Oriental Trading traces its history back to the Great Depression, when Harry Watanabe, a Japanese immigrant, bought a gift shop in Omaha. He declined to make any further statements because of current negotiations. “This investment didn’t work out the way we expected, but our overall portfolio is in very good shape,” Christopher Ullman, a spokesman for Carlyle, said in a statement. “It seems they would rather avoid a bankruptcy filing in many of these cases.”Īmong the possible outcomes is that Oriental Trading could be sold to another firm, it could declare bankruptcy or the banks could take it over, wiping out the investment made by Carlyle. “The banks continue to try to work and do what they can with troubled borrowers,” said Scott Tuhy, an analyst with Moody’s Investors Service, which downgraded Oriental Trading’s debt earlier this month. Many have negotiated with lenders to delay loan payments or ease the terms on their companies’ debts. So far, however, these investment firms have proven to be extremely astute at shepherding their companies through the recession. Oriental Trading, which mails out 300 million catalogs annually, has been hit hard by rising postal costs.īut the company, with annual revenue of about $485 million, has also struggled to shoulder the mountain of debt stemming from its leveraged buyout by Carlyle, whose private equity empire includes brand names like Hertz, AMC Entertainment, Dunkin’ Donuts and Baskin-Robbins.Ĭarlyle bought Oriental Trading from another private equity firm in a deal valued at $1 billion in the midst of the biggest buyout boom in history.Ĭritics contend that private equity firms sometimes saddle the companies they buy with dangerous levels of debt. ![]() It is currently in talks with its lenders to fix its tilting finances. The company missed an interest payment in late May on part of its $640 million in bank loans. ![]() It is just the latest setback for the venerable Oriental Trading, which made headlines last year when the son of its founder lost nearly $189 million in a single year on the game tables of Las Vegas.
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