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.
Me too.
Eddie Boo Bah . . . affectionately.
How about a list of “top 12” brands Freepers would like to see go.
1. GE (Owner of the political agendas known as NBC-Universal and MSMBC).
2. Google (In spite of what they offer and their massive presence; a. they are FAR too political, b. they help the Chinese government restrict what the Chinese people find on the Internet, c. they spent years promoting “net neutrality”, which simply favors their business model - where someone else must spend their money to make the highway robust enough for Google’s additional products, only to end that effort seeking their own special deals for the major service providers to have Google’s servers embedded directly, physically in their networks (which would leave all other search engines where?).
3. Nike, and their top three competitors - all over rated.
4. CITGO - close the dictator’s direct access to U.S. consumers
5. Lukoil - close Putin’s direct access to U.S. consumers
(yes, I know, with regard to 4. and 5., the markup for the retail price is not great, but Chavez-Oil and Putin-oil should be restricted to imports to our own refiners and not permitted domestic U.S. operations)
6. U.S. Air - let Southwest air grow some more
7. CITIBank and BOA - they should have been declared insolvent, and UNDONE - by the FDIC, with the FDIC disbursing their branch operations, and the FDIC insured depositors, along with a proportionate portion of supposed “toxic” assets, to many regional and small banks, with good balance sheets, across the country; the credit-card accounts could have been sold, at auction, to any and all comers.
8. Mercury - Ford doesn’t need it.
9. ?????
The problem with apparel and footwear is that it’s so easy to knock off even with good legal help. My Canadian friend from MBA school started a line of children’s clothing in the late Eighties. While the undergarments were made in the US, the jeans and heavily detailed work was made in Hong Kong.
The law firm found that employees of his contractor copied the logo and applied it to substandard products then sold it on the streets of Hong Kong as well as making it available to street vendors in the US. My friend was livid but spending tens of thousands on going after these individuals just drained him financially and he closed his company.
United has been mismanaged for the past 20 years. It’s been on the brink of going out of business so long I began to think of it as the Generalissimo Francisco Franco of airlines. Delta and American will be the top dogs when all is said and done. Oh, US Air is a dead airline flying to paraphrase the movie title.
Whew!!!!! None of my favorite stores were listed.
Salvation Army Thrift Store
Goodwill is also good for bargins
99 Cent store
I guess I’ll be able to continue to shop.
Yes, Cato the Elder never got over his last flight on United Airlines—he asked for wine and all they had was retsina. He was sure they were trying to poison him.
Some things never go out of style.
AMEN!!
As for Esquire, ostensibly an adult male magazine, it just can’t withstand a culture of ubiquitous man-children, with their backward baseball caps and dungarees, trying desperately to make a muscle t-shirt and hair gel work despite having crossed the rubicon of age 50.
Why is the name ‘Pitney Bowes’ never on lists like this? They deserve extinction more than anybody on this list.
Try being 6’6”. If it takes 12 hours or less to drive I drive.
By coincidence, Caesar was 50 when he crossed the Rubicon in January 49 B.C. (he was born in July 100 B.C.).
That happened in 2006. I have not flown since, except for flying First Class to Maui in 2007. BIG difference.
I think my legs suffered an incurable condition on that United flight. (I’m no spring chicken)
I like it when I am accidentally cerebral. Thanks!
3. Nike, and their top three competitors - all over rated.
Underarmour and Adidas kick ass.
I was on US Air flight where the Flight Attendant was putting ice into drinks with her bare hands, she had the sniffles too. I didn’t really care because had I seen her in a bar I would have made out with her.
It’s not the airline fault once the plane leaves the gate. I was listening to ATC on one flight and we had to wait on the tarmac because some fool filed incorrect flight plans.
The original Eddie Bauer went bankrupt and the name was bought by a new company, which is now going bankrupt. Most brands will continue on with new owners.
Just like Listerine, whiskey kills 99.99% of all germs on contact.
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