Led by Nokia, American Apparel and MySpace, these companies are on the verge of being liquidated, acquired, or eliminated
Ten brands are at risk of disappearing in the next year, including Nokia, American Apparel and MySpace, according to our latest brand analysis. Other at-risk companies include Sears, Sony Pictures, Saab, and Soap Opera Digest.
Last year's list proved to be prescient in many instances, predicting the demise of T-Mobile among others. In late May, AT&T and Deutsch Telekom announced that AT&T would buy T-Mobile USA for $39 billion. The deal would add 34 million customers to the company and create the country's largest wireless operator.
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Other 2010 nominees, including Blockbuster, bit the dust. In April of this year, Dish Network acquired the company for $320 million. Still other companies, such as Dollar Thrifty, are on the road to oblivion. The car rental chain is still entertaining buyout offers from Avis and Hertz. On June 6, the embattled company recommended that its shareholders not accept Hertz's recent offer, valued at $2.24 billion, or $72 a share. Meanwhile, on June 13th, Avis Budget announced that "it had made progress in its discussion with the Federal Trade Commission regarding its potential acquisition" of the company. Although Dollar Thrifty can remain choosy, a sale is a matter of when, not if.
We missed the mark on a few companies. Kia, Moody's, BP, and Zales appear to be doing better than we expected.
Brands that have stood the test of time for decades are falling by the wayside at an alarming rate. Pontiac, a major car brand since 1926, has been shut down by a struggling GM. Blockbuster is in the process of dismantling, after it once controlled the VHS and DVD markets. House & Garden folded after 106 years, succumbing to the advertising downturn and online competition. Its demise echoed the 1972 shutdown of what is probably the most famous magazine in history, Life, which goes to show that no brand is too big to fail if it is overwhelmed by competition, new inventions, high costs, or poor management.
This year's list of the 10 Brands That Will Disappear takes a methodical approach in deciding which brands will walk the plank. The major criteria were as follows: (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 which are sold; (5) companies that go into bankruptcy; (6) firms that have lost the great majority of their customers; or (7) operations with rapidly withering market share. Each of the ten brands on the list suffer from one or more of these problems. Each of the ten will be gone, based on our definitions, within 18 months.
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