The Top 12 Brands Likely to Disappear 44 comments
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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.
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This article has 44 comments:
Not 'Architectural Digest'!
Where will I get my hard-hitting architectural news stories about California beachfront homes?
I guess I'll just have to watch 'Cribs' or 'Entourage', but it's not the same.
I only regret M-TV didn't make the list.
I'm with Scissors, worst SA article evah.
Yes indeed, Hot Richard, it's a darn shame that MTV is not going away!
I knew a lot of brands were most likely going, but when you see it in writing, it drops a quite different bomb perspective on your brain!
BeWhew!
We would have all been better off had the Gov. let Chrysler parish the first time. And good riddance to the others.
America, let's stop spending so much money!!! Make AXP, MC and Visa the next to fold!!
Its the same story with Palm, Eddie Bauer, Chrysler & Saturn-- they all represent excess capacity which, once taken out of the system, will allow the survivors to operate more profitably.
rim and apple are losing people left and right because of unstable os problems. they are headed towads palm. look at the list of the storms and older iphones landing there that can be upgraded. i myself was going to get a storm until i saw a friend who says its crap.
the reviewers, the video and developers are enough to let us know we, palm know we have a new innovator on our hands and it will continue to change with higher speeds, new os (free) upgrades. and yes i know sprint. well it has improved hills and valleys in the past years.
this is not an end, its a beginning....
It is more likely that 24/7 Wall Street won’t make it through the year.
seekingalpha.com/insta...
Palm may have experience in the smartphone industry but it hasn't shown up to this point. Let's see how the Pre does.
On Apr 22 08:28 AM TeckieGirl40 wrote:
> hmmm? a month before the Pre is to be released its going away? I
> dont think so. Palm built this market and has the experience to innovation
> to carry on. I also read somewhere that linux is going away too.
> I also heard that microsoft is dying a slow death. we'll see with
> windows 7 which is supposed to kick some new life into mac.
>
> rim and apple are losing people left and right because of unstable
> os problems. they are headed towads palm. look at the list of the
> storms and older iphones landing there that can be upgraded. i myself
> was going to get a storm until i saw a friend who says its crap.
>
>
> the reviewers, the video and developers are enough to let us know
> we, palm know we have a new innovator on our hands and it will continue
> to change with higher speeds, new os (free) upgrades. and yes i
> know sprint. well it has improved hills and valleys in the past
> years.
>
> this is not an end, its a beginning....
On Apr 22 03:53 PM Suthrn wrote:
> In the two days since this article was written, CROX stock is up
> over 30%!
>
> It is more likely that 24/7 Wall Street won’t make it through the
> year.
This is exactly the kind of comment that is written by someone who is too focused on the day to day movements of a stock. Daily price action is meaningless. Where do you think the stock price would go the day they announced they were going bankrupt? That's the only day that matters.
Enron was at $60/share... right before the stock tanked and went to $.04/share.
On Apr 22 03:53 PM Suthrn wrote:
> In the two days since this article was written, CROX stock is up
> over 30%!
>
> It is more likely that 24/7 Wall Street won’t make it through the
> year.
>
> America, let's stop spending so much money!!! Make AXP, MC and Visa
> the next to fold!!
Actually, MC and Visa handle both debit AND credit card transactions (IOW, they're working both _sides_ of the street. They should be fine.)
I can't say the same for AXP, though. :(
On Apr 22 09:35 PM Dr. O wrote:
> The Street.com.
You really think Jimbo is going to let TheStreet.Com die?
LONG PALM
#8 - Chrysler is now going to have a stake owned by the government & UAW. No matter how poorly it performs, it'll get bailed out...AGAIN. It's not going anywhere.
#9 - Good call Eddie Bauer filed for bankruptcy this week. Wish I'd shorted it!
Cetin's negative rating is 5 times higher (lower?) than yours.
I'm impressed that your dividend income is sufficient to support your family.
Clearly, you've done the right things with your portfolio. Now, why not let us in on your 'secret.'
Or will we need to subscribe to your investment magazine?
On Jun 19 10:19 AM bcncv wrote:
> Didn't I read that Eddie Bauer might get bought out of bankruptcy
> by a PE group? Just because the company is filing bankruptcy doesn't
> mean the brand will disappear.
Often times the least popular comments here (especially if they are bashed by those end-of-the-world crowds) are the best ones for making money.