Am curious how the profitability part is calculated. Seems like annuity payments or interest/payback on the loan is ignored? If these chains were profitable after counting in debt, there would be no debt - right?

Yes : https://www.investopedia.com/terms/e/ebitda.asp

I think the GP is saying that absent the LB types extracting the money in the past, these companies would be profitable even after including interest payments because they had no business need to take on that debt. It was incurred solely as a mechanism to turn the company into a debt-machine for the benefit of the then shareholders. They took a bunch of expected future earnings, as a lump sum, at that time that turned out to not be real.

I posit that shopping by visiting multiple stores and maybe finding what you need is a less optimal experience than choosing what you want on a screen and having it delivered. You waste less time, vehicle and fuel expenses, and you get what you want. There might be a few niches where touching or trying it on make for a better shopping experience, but for the most part, I think people would be opting for online purchasing which would put many stores in trouble even without the debt.

Hmm, I hadn't thought of it that way. I had figured that having it delivered was less efficient. But once you factor in me having to drive to the store just for my purchase, whereas the delivery truck is going to make N deliveries, I think you're right that delivery is actually more efficient.

If the companies that went to PE for money were healthy, then they wouldn’t need PE.