Ten Brands that will disappear in 2013

[brooklynite]

24/7 Wall Street:

4. Research In Motion

RIM once owned the smartphone market. Its BlackBerry products were used largely by businesses. It is hardly worth repeating the story of how RIM was late to the consumer market, where it has been pounded relentlessly by Apple and an army of Google Android phones from manufacturers as diverse as Taiwan’s HTC, South Korea’s Samsung and Motorola in the U.S. The pace at which the company fell apart once the process began was even more extraordinary than its rise. Revenue and net income jumped from $6 billion and $1.3 billion, respectively, in fiscal 2008 to $20 billion and $3.4 billion in fiscal 2011. In just the past year, however, the company has warned twice that it would miss its earnings forecast, replaced its long-time CEO, warned a third time about its first-quarter loss, and disclosed plans for layoffs of thousands of employees. The company’s board said it was reviewing “strategic options,” which would include a sale. The best measurement of the swiftness of RIM’s fall is the change of its share of the U.S. smartphone market. Research group NPD recently reported that RIM’s U.S. market share was 44% in 2009 but only 10% last year. Data from research group Comscore shows that share has fallen further this year. The net effect on RIM’s stock price has been devastating, taking it down from $144 four years ago to $11 recently. RIM cannot survive as a standalone operation in the face of these trends. The Wall Street Journal recently reported “outright buyers could include Asian handset makers like HTC Corp or online retailer Amazon.com Inc. which has jumped into the tablet business.”

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.

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.

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.

[rsmith6621]

1. American Airlines???

Someone I know in Accounting says they have plenty of money. The BK filing is an attempt to use the courts to extort money from the pocket books of their employees, much like UAL did a few years back

I dont think AA is going anywhere anytime soon.

[KaryninMiami]

3. AA is in negotiations to merge with US Airways

but an industry friend informed me that if this happens, the new brand will be under the US Air name which I find to be rather unbelievable but that's what they said. Guess we'll see what unfolds...

http://www.star-telegram.com/2012/06/20/4047905/us-airways-brings-the-fight-to.html

[rurallib]

2. I thought businesses could do no wrong

another lie Republicans told me.

[pfezziwig]

4. In depth analysis

Wow you really did your homework for this article.....if homework can be called regurgitaing headlines from the last year.

Blackberry nation grew in a transition year to an entirely new OS, how many other companies could pull that off?

I think you need to be in debt and losing customers in order to facilitate dissappearing, I guess RIM better get busy if they are to make your prediction come true.

[Bucky]

5. Suzuki, Avon, and Salon.com? Wow, pretty ballsy predictions

American I can believe; it's not a well run company and most airlines don't have high profit margins in a very competitive industry. If gas prices keep dropping, they might just survive, but I wouldn't be shocked to see them die off.

On the other hoof, Suzuki, Avon, and Salon have a lot of options they can play to weather the shifting economy. Salon could retool to be more Huffington-like and keep its ad revenues coming in. The first too have pretty stable retailing infrastructures that could keep them pulling cash flow until a smart new product line comes along to boost popularity--just let Mother Necessity do the rest. The real test of survivability is the ability to expand into global markets, although those are rocky shoals for the next few years.

For instance, we're in for a pretty crappy year in 2013. Europe won't start recovering before then and still needs to survive whatever mischief austerity causes and China is struggling to develop their consumer sector. The whole world is gonna have a tough 2013. On the other hand, there are still growth spots in world trade like Brazil and India to balance things out. If they could corral their drug gang problems, Colombia and Mexico both have huge growth potentials.