The end of Toys “R” Us marks a turning point for global business and is in many ways an encapsulation of our current time. As big box wanes, and hypermarkets and discount stores cling to the space that Amazon hasn’t quite gobbled up, it’s a much different world than we were in even 10-15 years ago, when Toys “R” Us was purchased by private equity in a $7.5 billion deal. Even leveraged buyouts like this don’t happen quite like they used to.

Bloomberg Businessweek published a killer story covering the remaining years of Toys “R” Us, which was already hurting before it was acquired in 2004. And while not stated specifically by the authors at Businessweek, the 2005 leveraged buyout seems to have doomed the company that was struggling with margin and cashflow issues. Management and the owners just couldn’t seem to get out from under the yearly debt obligations — as they had to spend money there instead of on investments in the business.

Complicating the executives’ efforts, though, was the central fact of the company’s existence: It was living on borrowed money. When Toys “R” Us filed for bankruptcy in September, one figure was particularly clarifying. The company had been paying interest of $400 million on about $5 billion of debt every year for a decade. In the good years, that was almost half its operating profit. Toys “R” Us had U.S. revenue of $7 billion and, even toward the end, a 14 percent share of the toy market, but there was no math that made $400 million look sustainable.

Toys “R” Us was caught: It didn’t have the money for Brandon to test “a lot of stuff” to make its stores modern, fun, distinctive, convenient—or even two of the four. The baby business was faltering. And though the company had wrested back its website, when it finally upgraded its technology to allow customers to check out in fewer than five steps, it was already a half-decade behind. By then, Best Buy Co. was holding off Amazon with its Geek Squad; Target had distinguished itself by creating a billion-dollar kids’ clothing line; and Warby Parker had proved that people will try out and buy products in stores if the stores are appealing and the staff knowledgeable.

The magnitude of a $7.5 billion leveraged buyout is hard to comprehend, but the principles of debt and income hold for any business. If you’re worried about cashflow, taking on a ton of debt without a strong plan to put it to work runs the risk that all debtors face, sliding back faster than you can progress.

Also worth noting, when bankruptcy is in the picture, this article has a good reminder of whats at stake with privacy and data: it can get away from you even if you have the best of intentions to keep it safe.

An auction for the company’s name, customer data, and baby-shower registry will be held on June 18 in bankruptcy court in Richmond, Va. Target had earlier expressed interest in the registry and the Babies “R” Us website.

For companies that end up in bankruptcy, and customers who patron them (which is all of us, because how can you know), inoculating yourself against this potential eventuality is worth doing.

This is a rough story, but a fascinating one, and certainly has some lessons to teach. Read the whole thing here.