A number of well-known brands disappeared in the last year in large part due to economic forces. Many of them were in the retail industry, led by Circuit City. ATA and Aloha airlines are gone. Gateway Computers has effectively disappeared after being bought by Acer. It still has a website, but the brand is no longer marketed.
As the recession deepens and stretches out quarter after quarter, more companies will close or will shut divisions. More brands will disappear because their parents firms fold or can no longer afford to support them. Other brands will be obliterated by mergers.
24/7 Wall St. examined 100 large brands that are facing troubled futures. The analysis included records for those brands that are public companies or part of public companies. We considered sales information, information from industry experts, and brand histories. We also looked at the level of competition in each brand’s market and the extent to which that competition is growing. We examined the likelihood that a brand could be sold or spun off in cases where parent companies are in financial trouble.
We have compiled a list of 12 brands that will we believe will not survive until the end of next year. Each brand and the major reasons for its demise are listed along with some of the public information 24/7 Wall St. examined.
1. Avis/Budget (CAR) operates two car rental businesses.
2. Borders (BGP) has struggled for several years as the No.2 operator of book store behind Barnes & Noble
3. Crocs (CROX) sold the fastest growing footwear in America at one point. In late 2007, the company’s shares traded at more than $72. Now they change hands at well below $2.
4. Saturn was created by former GM (GM) CEO Roger Smith
5. Esquire Magazine is published by Hearst which is having substantial problems in both its newspaper and magazine divisions.
6. Gap (GAP) Old Navy and Banana Republic. Gap is a three-brand company living in a two-brand body.
7. Architectural Digest Magazine has lost 47% of its ad pages this year. The magazine is owned by Conde Nast.
8. The Chrysler brand of Chrysler LLC faces a problem similar to the one that GM faces with its weakest brands. As it moves closer to bankruptcy..
9. Eddie Bauer (EBHI) stock trades at $.38 now. Just last September it changed hands at more than $8.
10. Palm (PALM) has been at death’s door for some time..
11. AIG (AIG) may be the only large company in America that both the management and federal government want torn apart.
12. The travel industry has been so badly damaged by the economy that the airline industry faces substantial overcapacity.
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It is truly a sad state of affairs but yet, not unpredicatble. Many of our nations businesses and companies have practiced the same bookeeping practices as did our citizens.
ReplyDeletePurchasing equity in exotic investment vehicles is a risky endeavor even with a favorable economic climate. That practice coupled with massive debt overhang owned by the public and our nations retailers will spell disaster in this long term cyclical depression.
I often marveled at the apparent abundance of those around me, wondering how it was possible. My household could only be described as meager at best. It now appears the abundance was only surface deep and is evaporating rapidly.
This economic catastrophe will leave a scar that will define earning, spending, and saving across our society for the next two generations.
It is an illwind that blows no one some good
ReplyDeleteAt the end of this will be banks owned by Americans with real money backed by gold etc. And stores that supply what is really needed. Did we ever need Banana Republic,Old Navy or any dozens of other retailers? Local community is the byword of the future.