17 Great Companies That Came Back From the Brink of Death
Every year, some companies go bankrupt and others somehow recover. Great products, talented employees, and, in some cases, the government can help. Fortunately, the companies on this list had all those things, becoming dramatic corporate comebacks. One beloved U.S. chain was on the brink of death in 2008, but now it’s stronger than ever (page 10).
Now, Apple is the most valuable company in the world, but there was a time when the tech giant teetered on the edge of bankruptcy. Twenty years ago, media predicted the death of the company and it was losing $1 billion a year. Then founder Steve Jobs returned, launching revolutionary products like the iMac and iPod. Now, people wish they’d bought the company’s stock when it was at bargain-basement prices.
Next: This company is “flying high” after near death.
By September 2005, Delta Air Lines had racked up billions in debt. One bankruptcy judge summarized it best when he told Delta executives, “I have not heard anything that I will say remotely impressed me that you have the money, the talent, or the thought that you could successfully reorganize in this case.” The company simply couldn’t compete with newer airlines like JetBlue and Southwest, among many other issues.
However, Delta defied odds by renegotiating union contracts, purchasing used planes over new ones, and dozens of other reforms. These days, the airline is adding extra routes to places like Paris and Amsterdam, as well as new routes to regions like India.
With two Chapter 11 bankruptcies in the past decade, Sbarro demonstrates how to keep calm and carry on. The imminent death of shopping malls has a huge influence on Sbarro’s previous food-court focus. Since its near demise, the pizza and pasta purveyor has rebranded itself as a fast-casual restaurant with a new store concept. It opened 65 U.S. locations in 2017, according to Reuters, and plans to launch many more in Asia and Russia in the next few years.
Sbarro seems to be one of the lucky few restaurants and retailers to survive the shopping mall apocalypse.
Next: This tech retailer learned from its former competitors’ mistakes.
4. Best Buy
Best Buy is the world’s largest brick-and-mortar electronics store. But a few years ago, it looked like it may join former competitors like Circuit City in the retail graveyard. In 2010, sales and profits were way down. A scandal involving the then-CEO in 2012 only made things worse, as Salon reported. Remarkably, the company turned itself around.
The new CEO cleaned up disorganized stores, shuttered failing locations, brought in exclusive products, and improved service. Most importantly, the chain integrated the online and in-store experiences and staffed stores with employees who were experts in popular brands like Samsung and Apple. Customers returned, and by 2016, both the profits and company’s stock price were up.
Next: Do you remember these classic video games?
Established in 1889, Nintendo didn’t develop its first game system in 1975. Then came Donkey Kong and Super Mario (the 1980s), Game Boy and Nintendo 64 (the ’90s), and the mega-popular Wii (2006). But all it took was one bad release in 2012. Nintendo suffered when its Wii U faced “poor marketing, inconsistent title release, [and] lack of third-party support,” says GameHubs.
The comeback kid? 2017’s Nintendo Switch, which sold over 8 million units in its first 10 months. With new hit releases and the fastest-selling console in U.S. history, Nintendo ended 2017 with $1.6 billion in profits, an insane rise of more than 500% year-over-year, explains Forbes.
Next: This “Big Blue” tech company is hanging in there.
IBM is one of just a handful of companies that’s managed to keep its spot on the Fortune 500 list for more than half a century. Yet in the early ’90s, “Big Blue” nearly died. In 1992, it lost $5 billion (more than any other American company ever at the time).
New CEO Lou Gerstner turned things around — at a cost. He fired close to 100,000 people, loosened the uptight corporate culture, and changed the marketing strategy. The future wasn’t without challenges and profits have fallen, but IBM generated more than $81 billion in revenue in 2015 by providing business services and producing software.
Next: Not your dad’s body wash anymore
7. Old Spice
This body-wash label was synonymous with older generations by the 2000s. Founded in 1938, Old Spice needed to appeal to a younger demographic, as brands like Dove Men+Care and Axe dominated the market. Old Spice began a new campaign during the 2010 Super Bowl weekend, with former NFL player Isaiah Mustafa telling viewers to “Smell like a man, man.”
Sales more than doubled that year as younger audiences connected with the campaign, which went viral on YouTube. Now you can find Old Spice in showers everywhere.
Next: Many generations recognize this brand’s toys.
Lego’s earned praise for its creative toys, but 10 years ago, the Danish company’s foundation was shaky. It was unwittingly selling some products for less than they cost to manufacture, while new toy sets failed to impress. The company streamlined operations, recruited passionate designers, and created partnerships with hit franchises like Harry Potter.
The new toy sets became popular, and a blockbuster movie also helped the brand. Now, two years after becoming the world’s largest toy company, Lego is so successful it’s struggling to keep up with demand.
Next: Who doesn’t recognize this iconic footwear?
Converse struggled with massive debt and troubled sponsorships in the ’90s. Then Nike bought it for $305 million — one of its best investments ever. As the Motley Fool explains, “If you bought Nike stock around the time that the sports apparel titan purchased Converse, you’d be sitting on massive long-term gains today.” Updated designs and marketing success have helped Converse’s profits. Elle even called Converse the “nostalgic sneaker of 2018.”
Next: This U.S. chain is stronger than ever.
Like several others on this list, Starbucks struggled during the 2008 financial meltdown. Things were so dire that former CEO Howard Schultz returned to the company to set things straight. The company grew too fast, as Business Insider explained, and was stumbling under its own weight.
Schultz quickly changed things, inviting people to email him with suggestions for improving the stores, briefly closing all locations for retraining, rethinking the company’s advertising campaign, and getting serious about social media. Though the chain did close several hundred underperforming locations in 2009, it emerged from the rough patch stronger than ever.
Next: This finance corporation pulled off a miracle.
Insurer AIG was once saved by the government, which owned virtually all of the company at the time. But AIG bought back its stock and is now the leading seller of fixed and variable annuities in the U.S., according to InsuranceNewsNet. President and CEO of AIG, Peter Hancock, wrote in a 2016 article, “AIG’s DNA is resilience, adaptability, and innovation. Many predicted our demise in 2008, but we survived and paid back our debts with interest.”
Next: Americans were devastated to see Twinkies go.
Founded in 1919, the snack company grew in popularity, absorbing its competitors to become an iconic food brand. But the corporate buyouts involved nearly 400 contracts for workers, 5,500 delivery routes, and a massive production system. Filing for bankruptcy, the maker of Twinkies faced 100,000 creditors and $860 million in debt.
Hostess’s new management bought it for $410 million, cutting jobs from 22,000 to 1,170. It cut back on transportation costs and utilized new technology to make up the difference. Now you can find Hostess back on the stock market and in grocery stores nationwide.
Next: Would you buy an American car?
In 1979, Chrysler was in bad shape due to the 1970s oil crisis, falling sales, and rising pressure from foreign competitors. The feds loaned the U.S. automaker $1.5 billion. Along with Lee Iacocca’s leadership, the financial aid pulled Chrysler back from the brink. In the ‘80s, it introduced new, inexpensive compact cars as well as minivans, which consumers eagerly snapped up.
Next: This superhero brand saved itself.
These days, we expect big-budget superhero flicks from Marvel. But 20 years ago, Marvel was bankrupt. The company didn’t know what to do with its many comic book properties. While rival DC Comics turned iconic characters like Batman and Superman into blockbuster franchises, Marvel failed to turn its superheroes into stars (Remember the 1986 flop Howard the Duck?).
Starting in the late ’90s, licensing deals successfully brought Marvel’s characters, like Spider-Man, the X-Men, and Blade, to theaters. But Marvel still wasn’t making money. So, it started a studio — and it worked. The company was acquired by Disney and now Marvel regularly creates movies that rake in profits.
Next: It took more than a World Series to save this brand.
14. Chicago Cubs
After years of losing inside an old ballpark, the Chicago Cubs filed for bankruptcy in 2009. Valued at $845 million, the MLB team and Wrigley Field were sold to the Ricketts family. Since the transaction, Tom Ricketts has renovated the 102-year-old stadium, hired the best baseball executives, navigated Chicago politics, and remade the Cubs roster. The changes paid off; the Chicago Cubs won the 2016 World Series, its first title in over 100 years.
Next: This outdoor brand was lost in the woods.
15. Eddie Bauer
This outdoor apparel company invented the quilted down jacket and put the first American on Mount Everest in an Eddie Bauer parka. But debt and poor strategy hurt the brand. In 2009, the bankrupt brand was purchased by Golden Gate Capital for $286 million.
The new CEO Mike Egeck realigned Eddie Bauer to compete with Patagonia and North Face, designing for performance rather than lifestyle. Its marketing campaigns involve a digital focus, and it hopes to attract more male customers. In 2018, Eddie Bauer’s same-store sales are up 5%, and it’s considering a merger with Golden Gate-owned Pacific Sunwear.
Next: This fast-food chain thought outside of the “box” to survive.
16. Jack in the Box
In 1993, an E. coli outbreak at dozens of Jack in the Box restaurants created a major crisis. After eating contaminated hamburgers, four children died and more than 175 people were hospitalized (some suffered permanent kidney and brain damage). The scandal put expansion plans on hold and led to layoffs.
But stringent food safety standards and a clever marketing campaign helped the fast-food chain recover. Today, Americans love Jack in the Box’s food, including its “vile and amazing” tacos (it sells 554 million every year), according to the Wall Street Journal.
Next: Product recalls haven’t killed this car company.
GM, one of America’s biggest automakers, nearly ended up in the junkyard after the 2008 financial crisis. Only a $50 million government bailout saved the car company. GM turned itself around, but it’s still faced problems, including several recalls involving faulty ignition switches and airbag glitches. People keep buying their vehicles anyway, with growing sales and earnings higher than expected.