Macy’s $5.8 Billion Buyout Bid Follows Litany of Retail Misfires

The proposed leveraged buyout of Macy’s Inc. is a reminder that retail has been a notoriously tough sector for private equity, with debt of companies that were taken private in recent years falling to distressed levels.

Many bonds issued by Michael Cos., At Home Group Inc. and Staples Inc. carry triple-C ratings and trade below 80 cents on the dollar following the firms’ deals with private equity sponsors. The retailers’ operations were pressured before the transactions, meaning the subsequent debt left them with unsustainable leverage, according to Bloomberg Intelligence analyst Mike Campellone.

JPMorgan Chase & Co. analyst Carla ...