TOMS, the company that makes the lovely socially-conscious slip ons and made the "buy one, give one" model blow up, is selling 50% of itself to Bain Capital, the private equity firm founded by Mitt Romney and portrayed as almost comically evil during the 2012 elections, Reuters reports.
According to Reuters:
It also sells eyeware on the same basis, donating one pair of glasses for every one purchased. TOMS says on its website it has given more than 10 million pairs of new shoes to children in need and helped restore sight to over 200,000 people.
Bain's investment will be used to accelerate TOMS' business programme and support its philanthropic activities, one of the people said.
Bain is not, in fact, as comically evil as it was made out to be during the election. But it is a private equity firm, whose general uber-capitalist ethos does not necessarily jibe with the high-minded social goals of a company like TOMS (though TOMS's model, too, has come under attack for being more about Western consumers feeling good than about fixing real footwear shortages in the developing world). How will TOMS fans—and the social enterprise community—respond?
Founder Blake Mycoskie will stay at the helm and continue to own 50 percent of the company. We've asked TOMS for comment and will update this as we can. In the meantime, remember that the nice story about your socially-conscious shoes now has another, less noble character heavily involved.
UPDATE: Toms and Bain have released a statement in which Mycoskie explains that he is taking the money to help "enable TOMS to grow faster and give to more people in more ways than we could otherwise." He's also starting a foundation to give away half of his profits from the sale to support social entrepreneurship.
Bain, for their part, assure everyone that it loves the one-for-one model, even though it involves giving away a lot of money, and—beyond that!—it is "committed to give back to the community through a new charitable endeavor, funded by Mycoskie and a matching investment from Bain Capital, which will be established to support social entrepreneurs around the world."
And if you're worried about what's going to happen to TOMS with Bain involved, fear not, Bain would like to note that they've helped a lot of consumer companies grow, and TOMS will be no different. Just look at this list of Bain investments that TOMS joins:
"Michaels Stores, The Gymboree Corporation, Dunkin’ Brands Group, Burlington Stores, and Dollarama."