Just over a decade ago, Sony Ericsson was one of the hottest cell phone makers in the world. Similarly, Cingular was one of the most popular wireless carriers. And Compaq, too, was one of the hottest PC brands. Now, these brands and several others have effectively ceased to exist.
These and other popular brands were household names in the United States as recently as a few years ago. But because of different events, such as the financial crisis, mergers and acquisitions, or poor management, these brands likely will be unfamiliar to the next generation of Americans. These are great brands that just vanished.
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When brands vanish quickly, it is often a product of significant mismanagement coupled with industry pressures. This was clearly the case with companies such as Saab and Sony Ericsson. Saab, which was once a successful niche automaker in the United States, failed to maintain a successful brand into the 2000s. A series of failed deals and missed payments were the nails in the coffin.
Other brands, such as Compaq and Cingular, did not disappear because the brand was mismanaged by the original company. Instead, these relatively successful brands were acquired and then subsumed by the acquiring company. Compaq, which as recently as 2000 had 20% of the U.S. personal computer market, was purchased by Hewlett-Packard. Then, as a result of poor strategy by HP, the brand slowly disappeared. Last year, the company announced it would be removing its name from any Compaq products. The future of the brand is uncertain.
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Other brands did not disappear because of weak market share but because of a single dramatic event. In the case of Lehman Brothers, Wachovia and Washington Mutual, that event was the financial crisis. These banks quickly turned from highly successful financial institutions into bankrupt or near-bankrupt companies purchased for a fraction of their former value.
24/7 Wall St. reviewed brands that were among the leaders in their industries at the beginning of 2000. To do this, we considered companies that were ranked among the most prominent in the world, based on brand valuation from groups like Interbrand, BrandZ and CoreBrand, as well as companies that were among the largest in the United States. To be considered, a brand needed to be either completely defunct now, or no longer sold in the U.S by its parent company.
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These are the great brands that just vanished.
At the turn of the 21st century, Compaq accounted for roughly 20% of U.S. PC sales. In 2001, Interbrand rated Compaq’s brand as the 24th most valuable in the world. In September of that year, competitor Hewlett-Packard Co. (NYSE: HPQ) announced that it would purchase the company for $25 billion in stock. Both companies’ sales had been dropping, and the merger was their attempt to compete with International Business Machines Corp. (NYSE: IBM). However, management issues and the shrinking PC market led to the continuing decline of both brands. Last May, HP announced it would be phasing out the HP Compaq label, and that the Compaq brand would be used only for select low-end products. Currently, attempts to buy a Compaq device on the Compaq website result in a redirect to the HP website. There does not appear to be a place on the HP website to buy Compaq-branded merchandise. According to HP sales representatives, while retailers like Wal-Mart Stores Inc. (NYSE: WMT) still may offer older Compaq laptops and PCs, HP no longer sells Compaq computers.
2. Washington Mutual
Washington Mutual, based out of Seattle, grew precipitously after Kerry Killinger was named chief executive officer in 1990. Under his leadership, the bank began acquiring smaller financial institutions for much of the next two decades. Later on, the company also was focused heavily on its brand and marketed itself as WaMu with popular ad campaigns. The firm’s marketing campaigns often mocked other banks as elitist and frugal. However, it was Washington Mutual that, in the financial crisis, became America’s largest bank failure ever. The company was bought up by J.P. Morgan Chase & Co. (NYSE: JPM), which may very well have been one of the financial institutions WaMu once made fun of.
3. Sony Ericsson
Sony Ericsson — a joint venture between Japanese conglomerate Sony Corp. (NYSE: SNE) and Swedish telecom company Ericsson (NASDAQ: ERIC) — was founded in 2001. The new venture quickly became one of the world’s best-known brands, ranking 36th out of 100 measured by Interbrand for that same year — above international mainstays such as Heinz and Louis Vuitton. Among its notable products were the T68i, the first widely available color phone, and the K750i, which included a cutting-edge camera and music storage capability. However, with the introduction of smartphones, Sony-Ericsson became an afterthought in a market dominated by Apple and Android phones. In October 2011, Sony bought out Ericsson’s share in the venture.
European car manufacturer Saab was a popular niche automaker for years. The brand’s 900 series had great success in the United States during the 1980s and 1990s, but the brand’s appeal began to seriously decline by the 2000s. General Motors Co. (NYSE: GM), which already owned half of the company, purchased the remainder of Saab in 2000, only to sell the carmaker in 2010 after its own 2009 bankruptcy. In 2008, Saab sold 21,368 units in the United States, according to data provided by Edmunds.com. The following year, it sold 8,600, units and has declined ever since. In 2011, Saab told its suppliers and workers that it could no longer afford to pay them. The company filed for bankruptcy that same year. In 2007, according to Corebrand, Saab was the 65th most valuable brand in the world. It now appears unlikely that another Saab will ever be sold in the United States.
In 2006, Charlotte, North Carolina-based Wachovia was the 54th most valuable brand in the world, according to BrandZ, and as recently as 2008, it was 67th overall. At the time, the bank was the fourth largest in the U.S. based on assets. But that year, the financial and housing crises left the bank in a serious bind. Because of its overaggressive lending practices, its earnings plummeted. On January 1, 2009, Wells Fargo & Co. (NYSE: WFC) completed the acquisition of Wachovia for $15.1 billion.
6. Cingular Wireless
Cingular Wireless was founded in 2000 as a joint venture between 60% owner SBC and 40% owner BellSouth. The brand quickly became a household name in the United States. By 2007, Cingular’s brand was worth over $9.2 billion, according to Brand Z. However, several mergers involving Cingular’s parent companies complicated its brand identity. In 2005, SBC bought AT&T, and then adopted the company’s name. The new AT&T Inc. (NYSE: T) then merged with BellSouth, and incorporated the orange hue of Cingular into its ads.
7. Lehman Brothers
Lehman Brothers was one of Wall Street’s most well-known and respected financial firms. But the housing crisis that roiled global financial markets in 2007 and 2008 led to Lehman’s eventual bankruptcy after sustaining massive losses from its mortgage investment operations. In September 2008, British bank Barclays PLC (NYSE: BCS) purchased Lehman’s U.S. investment banking business as well as its Manhattan property — which by that point was worth several times its core U.S. businesses. Other parts of the company were sold off as well. Japanese firm Nomura Holdings Inc. (NYSE: NMR) bought Lehman’s international businesses, and a group of senior company employees bought its asset management unit, Neuberger Berman.