Now playing
01:52
Believe it or not, Sears once revolutionized retail
PHOTO: Orangetheory Fitness
Now playing
02:13
This gym is actually opening studios during the pandemic
Now playing
02:24
How holiday spirit is surging despite the Covid-19 pandemic
NEW YORK, NEW YORK - NOVEMBER 19: A view of the window display as Macy
NEW YORK, NEW YORK - NOVEMBER 19: A view of the window display as Macy's Herald Square unveils Give, Love, Believe 2020 Holiday Windows on November 19, 2020 in New York City. (Photo by Eugene Gologursky/Getty Images for Macy's)
PHOTO: Eugene Gologursky/Getty Images North America/Getty Images for Macy's
Now playing
00:56
Macy's unveils holiday window display with gratitude theme
PHOTO: CNN/Target/Design by John General
Now playing
02:36
It's official: Black Friday is irrelevant
Now playing
02:23
Party City CEO: Consumers still want to celebrate together
NEW YORK, UNITED STATES - 2020/07/08: People wearing face masks shopping inside a retail store in Manhattan as the city enters phase 3 of reopening amid the coronavirus pandemic
As New York City enters phase 3 of reopening retail stores for indoor shopping, restaurants have been postponed for indoor dinning. The U.S. Department of Health recorded a total of 3,219,999 infections, 135,822 death and 1,426,428 recovered since the beginning of the outbreak. (Photo by Braulio Jatar/SOPA Images/LightRocket via Getty Images)
NEW YORK, UNITED STATES - 2020/07/08: People wearing face masks shopping inside a retail store in Manhattan as the city enters phase 3 of reopening amid the coronavirus pandemic As New York City enters phase 3 of reopening retail stores for indoor shopping, restaurants have been postponed for indoor dinning. The U.S. Department of Health recorded a total of 3,219,999 infections, 135,822 death and 1,426,428 recovered since the beginning of the outbreak. (Photo by Braulio Jatar/SOPA Images/LightRocket via Getty Images)
PHOTO: Braulio Jatar/SOPA Images/LightRocket/Getty Images
Now playing
01:38
US retail sales improved in September
PHOTO: thehouseofdrew.com
Now playing
02:01
Justin Bieber's footwear collaboration overwhelms site
PHOTO: Walmart
Now playing
01:01
See what's new inside Walmart stores
WHEATON, MARYLAND - APRIL 16: Customers wear face masks to prevent the spread of the novel coronavirus as they line up to enter a Costco Wholesale store April 16, 2020 in Wheaton, Maryland. Maryland Governor Larry Hogan ordered that all people must wear some kind of face mask to protect themselves and others from COVID-19 when on public transportation, grocery stores, retail establishments and other places where social distancing is not always possible. (Photo by Chip Somodevilla/Getty Images)
WHEATON, MARYLAND - APRIL 16: Customers wear face masks to prevent the spread of the novel coronavirus as they line up to enter a Costco Wholesale store April 16, 2020 in Wheaton, Maryland. Maryland Governor Larry Hogan ordered that all people must wear some kind of face mask to protect themselves and others from COVID-19 when on public transportation, grocery stores, retail establishments and other places where social distancing is not always possible. (Photo by Chip Somodevilla/Getty Images)
PHOTO: Chip Somodevilla/Getty Images
Now playing
02:32
How masks are reshaping the face of the retail economy
3119 E Third Street Dollar General in Dayton, OH on March 12, 2020.
3119 E Third Street Dollar General in Dayton, OH on March 12, 2020.
PHOTO: Maddie McGarvey for CNN
Now playing
06:07
Dollar General's business is booming. It's also vulnerable to crime, police say
Now playing
03:01
How private equity is gutting retail
Now playing
01:55
All retail bankruptcies are not the same. Here's what you need to know
Now playing
02:44
Is T.J.Maxx recession-proof?
LOS ANGELES, CA - APRIL 10:  Customers carry bags from  Bed Bath & Beyond store on April 10, 2013 in Los Angeles, California. The home goods retailer is expected to release fourth-quarter earnings figures after the closing bell.  (Photo by Kevork Djansezian/Getty Images)
LOS ANGELES, CA - APRIL 10: Customers carry bags from Bed Bath & Beyond store on April 10, 2013 in Los Angeles, California. The home goods retailer is expected to release fourth-quarter earnings figures after the closing bell. (Photo by Kevork Djansezian/Getty Images)
PHOTO: Kevork Djansezian/Getty Images
Now playing
00:58
Why Bed Bath & Beyond is in big trouble
A Kohl
A Kohl's Corp. store stands in Concord, California, U.S., on Tuesday, Feb. 24, 2015. Kohl's Corp. is expected to release earnings figures on Feb. 26. Photographer: David Paul Morris/Bloomberg via Getty Images
PHOTO: David Paul Morris/Bloomberg via Getty Images
Now playing
01:25
Kohl's needs to reinvent itself. Are Aldi and Amazon the key?
(CNN Business) —  

Sears and other retailers that bit the dust recently have two things in common: They couldn’t compete with Amazon and Walmart and they were backed by big private equity firms and hedge funds that horribly mismanaged them.

The primary owner of Sears (SHLD) was hedge fund manager Eddie Lampert. His ESL Investments firm bought a controlling stake in Kmart following its own bankruptcy in 2003 and then merged it with Sears.

Scroll through the list of some other high-profile retail bankruptcies, and you’ll notice that Sears isn’t the only one that couldn’t be saved by the supposedly smartest guys on Wall Street.

Many well-known retailers that ultimately succumbed to bankruptcy were loaded up with debt, making existing problems even worse.

Toys ‘R’ Us, which closed its doors for good this summer, was backed by private equity firms KKR and Bain Capital as well as real estate investor Vornado Realty Trust.

Bain was also the primary investor in kids’ clothing retailer Gymboree, which exited bankruptcy last year but closed 350 stores as part of the reorganization.

The slow, painful death of the mall – and many of its big tenants

Payless ShoeSource, owned by San Francisco private equity firms Blum Capital and Golden Gate Capital, went bankrupt last year and wound up closing nearly 700 stores.

But wait. There’s more! RadioShack, backed by hedge fund Standard General, has gone bankrupt twice since 2015. The hedge fund arm of Wall Street firm Blackstone (BX) owns struggling New York grocery chain Fairway, which filed for bankruptcy in 2016.

The carnage doesn’t end there. Private equity ownership has been particularly brutal to once-popular mall-based retailers. The Limited, Wet Seal, Claire’s and Aeropostale all went bankrupt and had private equity or hedge fund backers.

And in perhaps the biggest bust of all, Sports Authority, which was bought by private equity Leonard Green & Partners in 2006, shut down for good in 2016 – leading to the loss of about 14,500 jobs.

“Hedge funds are systematically destroying jobs across the nation,” said Carrie Gleason, campaign manager for Rise Up Retail, a worker advocacy group.

“From Toys ‘R’ Us to Sears, these financial predators are extracting the value out of these retail establishments, forcing the closure of thousands of stores, and throwing tens of thousands of workers into the streets,” Gleason added.

Failure to take online shopping threat seriously hurt many retailers too

But bloated balance sheets weren’t their only problems. Poor strategies didn’t help either. While Amazon (AMZN) may not have necessarily been the sole reason for the collapse of Sears, the rise of digital shopping was certainly an issue.

Some big retailers, like Walmart (WMT) and Best Buy (BBY), have built robust oniine and mobile shopping operations. But Sears and many of the others that went bankrupt failed to adapt to changing retail trends. A physical store is no longer enough.

“Brick-and-mortar retailers are fighting over an ephemeral slice of a shrinking pie,” said Jack Ablin, chief investment officer with Cresset Wealth Advisors.

Ablin added that many private equity investors lack the expertise to effectively make the shift from traditional retail to online commerce and that they were also reluctant to commit more capital for the long-term to transform these struggling retailers.

Sears is the fifteenth retailer to file for bankruptcy this year, Ablin noted. It joins other high profile private equity backed casualties Toys “R” Us, shoe seller Nine West and quirky gadget retailer Brookstone.