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10 Brands That Will Disappear in 2013

Each year, 24/7 Wall St. identifies 10 important American brands that we predict will disappear within a year. This year’s list reflects the brutally competitive nature of certain industries and the reason why companies cannot afford to fall behind in efficiency, innovation or financing.

American Airlines will disappear in 2013 because of its inefficiency. It was the premier carrier in the United States for almost 30 years — even surviving through periods when most other carriers went bankrupt. However, it lost its critical advantage of scale when Northwest merged with Delta (NYSE: DAL) and Continental merged with United (NYSE: UAL). Within two years, American became a medium-sized carrier.

[More from 24/7 Wall St.: The 10 Most Hated Companies in America]

Research In Motion (NASDAQ: RIMM) may be the best example of an innovative company that lost its edge. As a result, it will disappear in 2013. Five years ago, RIM was the only smartphone company of any size, and it had almost the entire corporate market. But it made a fatal mistake in failing to adapt its technology for consumer use. In June 2007, Apple (NASDAQ: AAPL) launched the iPhone, and the rest is history.

Pacific Sunwear (NASDAQ: PSUN) no longer has the capital to compete. The retailer will be gone by the end of 2013. In the company’s most recent 10-Q, it said one of its biggest risks was running low on capital and not meeting financial obligations.

We made many accurate calls last year, but the speed with which some of them came true was surprising. MySpace was sold by News Corp. (NASDAQ: NWS) less than a week after our list was published.

Several other 2011 nominees are also no longer around. Saab filed for bankruptcy only five months after 24/7 published last year’s predictions. The car company has been sold yet again to an investment group called National Electric Vehicle Sweden, probably for little more than car parts.

In Nov. 2011, Ericsson dumped its half of the Sony Ericsson mobile phone business, apparently aware of something that Sony (NYSE: SNE) has yet to realize — the smartphone industry is owned by Apple and Google’s (NASDAQ: GOOG) Android-run phones. Similarly, Yum! Brands (NYSE: YUM) dumped A&W as sales were miniscule compared to flagship brands KFC and Taco Bell.

[Related: Taco Bell introducing more upscale menu items]

A few of the companies we said would vanish are still operating — barely. American Apparel is now a penny stock. Nokia (NYSE: NOK) is another company 24/7 still predicts will go away soon. The former Finnish heavyweight just fired 10,000 employees, or 20% of its workforce.

We also made a few bad calls. Sears (NASDAQ: SHLD) and Sony Pictures are still operating in essentially the same form they were a year ago. Kellogg’s (NYSE: K) Corn Pops and Soap Opera Digest are doing just fine.

This year we continue to take a methodical approach in deciding which brands to include on our list of brands that will disappear. The major criteria are:

1) a rapid fall-off in sales and steep losses;
2) disclosures by the parent of the brand that it might go out of business;
3) rapidly rising costs that are extremely unlikely to be recouped through higher prices;
4) companies that are sold;
5) companies that go into bankruptcy;
6) companies that have lost the great majority of their customers; or
7) operations with rapidly withering market share.

Each brand on the list suffers from one or more of these problems. Each of the 10 will be gone, based on our definitions, within 18 months.

This is 24/7 Wall St.’s 10 brands that will disappear in 2013.

1. American Airlines

American’s parent AMR filed for Chapter 11 bankruptcy in Nov. 2011. The airline itself still operates largely as it did prior to the filing, but with some of the advantages the bankruptcy of a parent brings. Labor costs will be cut, along with debt service and lease obligations for airplanes. AMR says it plans to emerge from Chapter 11 as a viable airline. But that will not happen. US Airways (NYSE: LCC) already has made it clear that it wants to buy American’s assets. As soon as the rumors of a potential buyout started in April, some of American’s largest unions said they backed such a plan as a way to protect jobs. Earlier this month, US Airways CEO Doug Parker announced his desire to merge the two airlines. With US Airways probably willing to give AMR’s creditors a good deal to get American’s assets, the potential deal received tremendous support from bondholders and analysts. US Airways has much to gain from this transaction, as its position in the carrier market has been eroded by the mergers of Northwest and Delta and the later combination of United and Continental.

2. Talbots

Battered retailer The Talbots (NYSE: TLB) is supposed to be taken private by Sycamore Partners for just over $2.75 a share, or $190 million. The offer has been delayed for some reason. Sycamore already has lowered its offer once from $3.05 a share it extended to the company in December. Among all the badly damaged retailers hurt by the recession, compounded by its failure to appeal to consumers with distinctive products, Talbots has to be near the top of the list. While its shares traded for almost $26 five years ago, they now change hands for $2.50. It is a wonder that Sycamore wants to buy the retailer. Even if the deal closes, Sycamore may find there is no solution to making the company viable again. When it last announced earnings, Talbots management said it planned to close 110 stores. The company also said it would try to find a new CEO. Talbots made only $1 million last quarter on $275 million in revenue. At the same time it announced earnings, it admitted that it could be in default under its debt facilities if its financial condition deteriorated further. Talbots has been flanked by a number of department stores that carry women’s discount ware and a number of niche chains, including Ann Taylor (NYSE: ANN), Chico’s FAS (NYSE: CHS) and Limited Brands (NYSE: LTD). The company’s earnings demonstrate clearly the extent to which customers have abandoned Talbots. Its revenue was $2.3 billion in fiscal 2008, a figure on which it lost money. Annual sales are barely half that now. With the exception of a tiny profit last year, the retailer has lost money every year in the past five.

[Related: Electronics Retailers Scramble to Adapt to Changing Market]

3. Current TV

Al Gore’s Current TV was on life support even before it fired its only bankable star, Keith Olbermann, in March following a set of battles with the host over his perks. He was replaced by serial talk show host failure Eliot Spitzer. Compared to Olbermann’s March figures, Spitzer’s ratings in April were down nearly 70%, according to TV audience measurement firm Nielsen. At the time, The Hollywood Reporter wrote, “Replacement Eliot Spitzer pulled an anemic 47,000 total viewers in the first outing of Viewpoint, with just 10,000 among adults 25-54. The weeks since saw an early rebound, particularly in the demo, but in its four weeks on air Viewpoint has steadily declined in both respects.” Reuters recently reported that Current TV’s audience had fallen enough that cable giant Time Warner Cable (NYSE: TWC) may have the right to discontinue carrying the channel. The closest Current TV has to a star is talk show veteran Joy Behar, a former cast member of “The View,” who had her own show canceled by CNN’s HLN in November. Gore does not have the pockets to keep a network with no future going.

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