Macy’s is closing stores. The Limited is bankrupt and shuttering locations around the country. Long-suffering Sears may not be able to last until 2018. Theranos, the disgraced blood testing company once valued at $9 billion, is as good as dead. Every year, American companies large and small succumb to bankruptcy or disappear when they’re swallowed up by larger rivals. While it’s sometimes sad to see a favorite brand go, these failures are a normal part of the business cycle, and experts love to predict which will be next to go.
But sometimes, the corporate deathwatch crowd gets it wrong. Just as history is littered with examples of once dominant businesses that failed, such as Kodak and PanAm, there are also plenty of companies that teetered on the edge of disaster and somehow recovered.
Corporate turnarounds are the dramatic comeback victories of the business world. Just when you’re ready to count a company (or a team) out, they manage to pull it together and eke out a victory. And as with sports, those come-from-behind successes are often engineered by an inspired coach-slash-CEO. Apple likely never would have become the powerhouse it is today without the visionary leadership of Steve Jobs, nor would have Starbucks survived its growing pains if former CEO Howard Schultz hadn’t returned to address the company’s problems.
Of course, a genius CEO isn’t the only thing you need to engineer a turnaround. Great products, smart marketing, talented employees, and, in some cases, a little help from the government, are important too. Fortunately, all of the 10 great companies on this list had those things, allowing them to stage some of the most dramatic corporate comebacks in history.
When it comes to corporate turnaround stories, there may be none more famous than Apple’s. It’s easy to forget now that Apple is the most valuable company in the world, but there was a time when the tech giant was teetering on the edge of bankruptcy. Twenty years ago, the media was predicting the death of the company and it was losing $1 billion a year. All that changed when founder Steve Jobs returned to the fold, launching revolutionary products like the iMac and, eventually, the iPod. Now, Apple products are ubiquitous, from iPhones to iTunes, and people are wishing they’d picked up some of the company’s stock when it was at bargain-basement prices.
2. Best Buy
Best Buy is the world’s largest brick-and-mortar electronics store, but a few years ago, it looked like it might join former competitors like Circuit City in the retail graveyard. In 2010, sales and profits were way down, and a scandal involving the then-CEO in 2012 only made things worse, as Salon reported. Remarkably, the company managed to turn itself around. The new CEO cleaned up disorganized stores, shuttered failing locations, brought in exclusive products, and improved service. Most important, the chain integrated the online and in-store experiences, making it easy to research products online and staffing stores with employees who were experts in popular brands like Samsung and Apple. Customers returned, and by 2016, both profits and the company’s stock price were up.
These days, it’s not summer (or, really, any other time of the year) without a big-budget superhero flick from Marvel. But 20 years ago, Marvel was bankrupt and casting about for a new direction, as ScreenCrush reported. The company had a huge stable of comic book properties, but it didn’t seem to know what to do with them. While rival DC Comics had managed to turn iconic characters like Batman and Superman into blockbuster movie franchises, Marvel’s attempts to turn its superheroes into silver screen stars failed miserably, such as the infamous 1986 flop Howard the Duck.
Starting in the late ‘90s, licensing deals brought some of Marvel’s characters, like Spider-Man, the X-Men, and Blade, to theaters in successful films. But the company still wasn’t making much money. So, it decided to start its own studio. The ambitious gambit worked. The company was eventually acquired by Disney and now Marvel regularly churns out movies that make money hand-over-fist.
GM, one of America’s biggest automakers, nearly ended up in the junkyard following the 2008 financial crisis. Only a $50 million government bailout saved the car company, but with the infusion of cash, GM was able to turn itself around. That’s not to say there haven’t been problems since, particularly several big recalls involving faulty ignition switches and airbag glitches. But people kept buying their cars and trucks anyway, and earnings in the third quarter of 2016 were much higher than expected and sales were up 10% in December 2016.
Big automakers weren’t the only businesses the government bailed out during the financial crisis. Insurer AIG was also propped up by the government, which at one point owned virtually all of the company, but the company came through the dark times. AIG bought back its stock and is now the leading seller of fixed and variable annuities in the United States, according to InsuranceNewsNet.
IBM is one of just a handful of companies that has managed to keep its spot on the Fortune 500 list for more than half a century. Yet in the early 1990s, “Big Blue” nearly went the way of the dodo. In 1992, it lost $5 billion – more than any other American company ever had at the time. New CEO Lou Gerstner succeeded in turning things around, though at a cost. He fired close to 100,000 people, loosened up the famously stodgy corporate culture, and changed IBM’s marketing strategy. The shake-up worked. Though the intervening years haven’t been without their challenges and profits have been falling, IBM still generated more than $81 billion in revenue in 2015 by making mainframes, providing business services, and producing software.
Like several other business on this list, Starbucks struggled during the 2008 financial meltdown. Unlike some companies, though, it didn’t require government intervention to right the ship. But things were so dire in 2008 that former CEO Howard Schultz returned to the company to set things straight. The company had grown too fast, as Business Insider explained, and was stumbling under its own weight. Once he returned to the helm, Schultz quickly set about changing 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, among other changes. Though the chain did close several hundred under-performing locations in 2009, it emerged from the rough patch stronger than ever.
8. Jack in the Box
In 1993, an E. coli outbreak at dozens of Jack in the Box restaurants set off a major crisis for the fast food chain. 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 implementing stringent food safety standards, along with a clever marketing campaign, helped the chain recover. Today, Americans can’t get enough of Jack in the Box’s food, including its “vile and amazing” tacos, of which it sells 554 million every year, according to the Wall Street Journal.
The 2008 financial meltdown wasn’t the first time the government stepped in to save a struggling U.S. automaker. In 1979, Chrysler was in bad shape due to the 1970s oil crisis, falling sales, and rising pressure from foreign competitors. The fed stepped in and loaned the company $1.5 billion to help it stay afloat. That money, along with leadership from Lee Iacocca, pulled Chrysler back from the brink. In the ‘80s, it introduced new, inexpensive compact cars as well as minivans, which consumers eagerly snapped up.
Lego has earned high praise for its toys, which encourage creative play for kids, but a little over 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 fans young and old. So, the company streamlined operations and set about recruiting designers who loved the product. The new approach worked. New sets proved popular (especially those tied to hit franchises like Harry Potter), and a blockbuster movie also helped the brand. Now, two years after become the world’s largest toy company, Lego is so successful it’s struggling to keep up with demand.