Posted on 04/25/2009 12:53:20 PM PDT by SeekAndFind
As the recession deepens, economic forces continue to drive consolidation in the retail industry, debt comes due and increasingly discerning consumers buckle down on discretionary spending, an analysis by 24/7 Wall Street predicts that a number of well-known brands are likely to disappear before the end of 2010.
To determine which brands are most likely at risk, 24/7 Wall Street examined 100 large brands it believes are in trouble and, for each, looked at public financial records, sales information, analyses from industry experts, the competitive landscape in each’s industry and the likelihood that a brand could be sold off in the case of parent-company financial trouble.
The analysis points to the most serious peril for the following 12 brands which, 24/7 Wall Street says are most likely to disappear by the end of 2010:
1. Budget rental cars (CAR): Though Budget’s parent company currently says it will continue to operate both the Avis and Budget brands, increasing debt problems, a weakening travel industry and intensifying competition will nonetheless cause the demise of the Budget brand, 24/7 Wall Street predicts.
2. Borders books (BGP): Declining sales, heavy losses and pressure from competitors Barnes & Noble (BKS) and Amazon (AMZN) - especially from new e-book readers - may prove too much for the brand when large amounts of debt come due in April 2010.
3. Crocs footwear (CROX): The decline in stock price from $72 per share in late 2007 to $2 today, ongoing financing issues, consumer belt-tightening and the end of a fad, leads to 24/7 Wall Street’s declaration that “Crocs won’t make it through the year.”
4. Saturn vehicles: As General Motors (GM) faces bankruptcy, 24/7 Wall Street said it will almost certainly shutter the brand, whose sales dropped 59% in the first quarter of 2009.
5. Esquire Magazine : While the Esquire brand is plagued with ad revenue declines and intense competition in the crowded men’s-magazine market, parent company Hearst faces problems on both the newspaper and magazine fronts and will not hesitate to close down underperforming brands such as this one to bolster its overall position.
6. Old Navy apparel: 24/7 Wall Street said that parent company Gap (GPS) - which currently markets the Gap, Old Navy and Banana Republic brands - is “a three-brand company living in a two-brand body” and cannot continue to sustain all three in the midst of steep, across-the-board sales declines. Old Navy, which is the weakest brand, will most likely not survive.
7. Architectural Digest Magazine: Amidst drastic cutbacks in high-end home sales and expensive redecorating, the once-healthy publication has lost 47% of its ad pages this year. Faced with other financial problems in its newspaper and magazine businesses, parent company Conde Nast will not be able to sustain the brand, according to 24/7 Wall Street.
8. Chrysler brand cars: Facing similar problems to GM as it teeters on the edge of bankruptcy, Chrylser LLC will not be able to support product design, manufacturing and marketing for a brand with many less sales than Dodge or Jeep as it gears up for restructuring.
9. Eddie Bauer (EBHI): Faced with declining sales, a stock price under $1, major debt problems and a CCC- rating, analysts say its lack of differentiation in the marketplace could prove the last straw. 24/7 Wall Street said it could be out of business by mid 2009.
10. Palm (PALM): A brand that 24/7 Wall Street says has been “at death’s door for some time,” faces life-threatening competition from RIM and Apple, and can only survive in the unlikely event that it can expand the smartphone market by increasing demand for its “Pre.” Dismal financial results and association with Sprint, the already-#3 US wireless carrier, will spell complete disaster.
11. AIG: The once-venerable insurance giant’s highly publicized financial problems, involvement in the financial crisis and subsequent bailout and indebtedness to the federal government, make it the “one large brand in America which almost everyone would like to see disappear,” according to 24/7 Wall Street. Because many of the company’s operating units do not bear the AIG name, they will continue to do business as they distance themselves from the “toxic” AIG parent brand, which eventually will go away.
12. United Air Lines (UAUA): As the travel industry faces unprecedented overcapacity in light of the recession, two of the large US carriers will soon need to merge to avoid bankruptcy. While it is not clear yet how such a consolidation will shake out, the stocks of UAL, American and US Air have plummeted. 24/7 Wall Street believes that United - the weakest of the carriers, soon faces a “merger,” which will most likely mean the end of the line for the brand.
I like United - Cannot stand US Air.
I like Eddie Bauer.
Well, we could save all these companies (and the jobs they provide) if we just bailed them out with some taxpayer money.
What was this website predicting, mmm, 3 years ago? Infinite growth, driven by increasing real estate prices?
Or say, 10 years ago...the New Digital Economy, which would never end? Remember that?
Why post crap from people who basically have gotten everything wrong for pretty much the entire time they have been publishing?
GM announced the end of the Pontiac line. They ceased Oldsmobile a few years ago.
With Palm’s rotten customer support They should have never existed, Good riddance.
Up until the 80s Esquire was a really good magazine, full of great writing, reporting, features and photography. Since it went left and crude and tried to compete with the “laddie books” it has become crap. Too bad, but I’ve been over it for 20 years. It’ll be gone but I won’t miss it.
No. 1 may well be the gutless RNC and GOP.
Old Navy is for high school kids. I wonder if American Apparel is taking away a lot of business for the college age kids.
more 0bama supporters out of work.
1. Republican Party
2. Conservatives
3. Non-elite Caucasians (aka “whites” or “rednecks”)
4. Christianity
5. Boy Scouts
6. Men's Athletics
7. Firearms and other weapons of self-defense
8. Freedom
9. Liberty
10. Capitalism (already replaced with Mercantilism, moving to Fascism)
11. Individualism
12. Achievement
A couple of the names were surprising (Eddie Bauer?), but this one wasn't. When your entire business model is based on a fashion fad that involves cheap ugly shoes, hey - how long did you expect it to last?
Not Architectural Digest!
I’ve loved that forever although it got a little minimalist for me.
Humility
Integrity
Shame
Sacrifice
Patience
Gratitude
Thrift
Not to mention this old brand. United States of America
Wait, you forgot something in your description - cheap ugly shoes that cost a silly amount of money.
Too bad about Saturn - we haven’t bought anything but Saturn for my husband’s work car since our first 10 yrs ago because of the “price is the price” policy and great customer service. And Eddie Bauer is his favorite store for clothes. I don’t think I’ll tell him.
What? No J-Crew where Blackie-O gets her clothes?
I hate United. Worst airline in history. I will do a little happy dance when it’s gone.
I have never had trouble with them. What’s your experience?
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