Pan American World Airways, Standard Oil, F.W. Woolworth, and Circuit City were once giants of American business. Today these companies exist only in people’s memories. Changing consumer tastes, evolving technology, corporate complacency, and bad business decisions ended these iconic brands.
The collapse of companies may seem abrupt. But plummeting revenue and leadership change can predict a company’s deaths. Of course, some, like Apple and IBM, step back from the ledge. But for every success story, there’s a bankruptcy. These 20 companies, including a beloved family-friendly restaurant (page 9), are among the walking dead.
1. Campbell’s Soup
You’d think the hipsters and young adults would appreciate the vintage look of Campbell’s Soup. However, the company’s throwback labels and long list of unpronounceable ingredients scare away millennial grocery shoppers. Many would rather make homemade soup or buy organic, better-marketed brands. In fact, Campbell’s isn’t even in the top 25 brands they recognize favorably. If this company doesn’t adapt to the times, it will surely lose in the long run.
Next: This shoe brand is the butt of many jokes.
Crocs’ declining stock spells trouble for the plastic shoe retailer. It announced the closure of 160 stores by the end of 2018, and Forbes attributes this to its losing battle against other companies’ athletic shoe offerings.
Crocs’ restructuring strategy includes cutting operational costs and narrowing down its product offerings. The company has brought on Drew Barrymore as a brand ambassador and has added a new sandal to its basic clog style. Time will tell if these steps create some buzz and generate sales.
Next: Profits aren’t bloomin’ at this restaurant group.
3. Bloomin’ Brands
In 2017, the owner of Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill announced it was closing 43 of its 1,500 restaurants. The three chains all experienced negative 2016 sales and hoped for a better 2017, but things don’t look good. To compete with fast-casual chains and delivery services, Bloomin’ Brands re-evaluated its strategy for 2017, reducing promotions, enhancing delivery services, and renovating existing locations.
In late 2017, an outside investor acquired an 8.74% stake in the company, and speculation was the company would sell off one or more of its brands. Word is still out on that and whether it would be enough to keep the ailing company afloat.
Next: Young adults don’t find this company cool.
Millennials aren’t interested in motorcycles like their parents were. This is causing hardship for Harley-Davidson. The ailing company plans to shutter its Kansas City, Missouri plant in 2019, with layoffs starting there mid-year.
Harley has been plagued further by having to recall 250,000 motorcycles globally because their brakes might fail. Shares of the company have declined about 12% in the past year, while retail motorcycle sales declined by 8.5% in the U.S.
Next: Sears might need to say “see ya.”
Sears was once one of the biggest names in American retail. Today it’s barely hanging on. As shoppers abandon the chain, more locations are closing. While Sears Holdings ran 3,500 Sears and Kmart stores combined in 2005, that number will soon be just 1,000. Some blame it on the company’s failure to invest in its online business.
Sales at Sears and Kmart stores plunged 16% and 17% in November and December 2017 compared to those months in 2016. Sears has also been losing appliance market share to the likes of Lowe’s, Home Depot, and Best Buy.
Next: You’ll see less and less of this name at local malls.
Teen-focused clothing chain Aeropostale filed for Chapter 11 bankruptcy in May 2016, simultaneously announcing that it was closing 154 underperforming stores. Competition from fast-fashion retailers like Forever 21 and H&M causes problems for the once-popular store, along with similar chains like Abercrombie & Fitch and American Eagle. Aeropostale was the weakest of the “three As,” according to analysts.
Aeropostale may hang in there, though. Mall operator Simon Property Group didn’t want the chain to go under since it would leave vacancies at its properties. In September, Simon and its partner, General Growth Properties, rescued the chain, which was in the process of being liquidated. In 2017, more than 500 stores reopened.
Next: No one is eating good in the neighborhood.
DineEquity, the owner of both Applebee’s and IHOP, is struggling to attract diners as fewer families eat out and millennials prefer local restaurants and fast-casual chains. The company planned to shutter up to 135 Applebee’s locations and up to 25 IHOP locations in 2017. Get your Rooty Tooty Fresh ‘n Fruity pancakes while you still can.
To make matters worse, the restaurants have been hit by internal scandal. A February 2018 report found that Applebee’s and IHOP have been sued for sexual assault by more than 60 employees. The allegations have been made by employees against managers, co-workers and franchise owners.
Next: A long-suffering company attempts drastic changes.
At one time, Eastman Kodak was a cutting-edge technology company employing 145,000 people. Fast forward to today, and the company is but a shadow of its former self. Many patents have been sold and buildings have been demolished as the company is shrinking after its 2012 bankruptcy. It’s been attempting an unlikely comeback in cryptocurrency of all things. The product, called KodakCoin, is described as a means for photographers to take control in image rights management.
Although Kodak’s stock rose more than 200% following KodakCoin’s announcement, critics slammed the company’s new product as a desperate money grab. Its money-making potential has also been called into question. To make matters worse, shares of Eastman Kodak plunged after the company delayed an initial coin offering, saying it needed several more weeks to verify the accreditation of the investors interested. Where this roller coaster ride will end up remains to be seen.
Next: This buffet needs a serving of success.
9. Old Country Buffet
Miss the Old Country Buffet at your local mall? So do many other hungry diners who tried to visit an all-you-can-eat dining experience only to find their local restaurant closed. Ovation Brands — owner of Old Country Buffet, Hometown Buffet, and other all-you-can-eat restaurants — shuttered dozens of its locations, often without warning, in 2016 and 2017.
Today, only around 23 Old Country Buffet restaurants still exist. Most states don’t even have one location. The end of the all-you-can-eat steak, potatoes, and ice cream buffet may arrive soon.
Next: Sexual harassment allegations didn’t help this risqué apparel brand.
10. American Apparel
In the late ’90s, American Apparel took over teen closets with its made-in-America T-shirts and other basics. The chain expanded quickly, gaining as much attention for its racy ads as its manufacturing practices. In 2007, the company was valued at $1 billion, but the twin problems of the 2008 economic crisis and a series of sexual harassment allegations against founder Dov Charney put it into a death spiral, ABC News reported.
In January 2017, American Apparel announced it was closing all 110 U.S. stores, though like the No. 20 store on this list, it still exists online. Social media is the company’s primary channel. “We’re basically a startup,” said Sabina Weber, head of brand marketing. Only around 25 people work out of the company’s new headquarters office in L.A.
Next: Shoppers are stepping out on this shoe retailer.
11. Nine West
Nine West is in final negotiations to restructure its $1.5 billion in debt, according to Bloomburg. This includes a Chapter 11 bankruptcy and selling off parts of its business, the news outlet reported. The shoe company has already sold off its Easy Spirit brand and closed most of its stores. Only 25 remain open today.
The ailing retailer has one of the highest debt-to-earnings ratios, with debt exceeding 19 times adjusting earnings. The company has been negotiating with its creditors since at least last year. The brand, now owned by private equity firm Sycamore Partners, continues to forge ahead with new projects.
Next: Even the most iconic department store is struggling.
We’ve discussed the venerable department store’s problems in the past, but it boils down to stiff competition from retailers (including online stores), changing consumer habits (many don’t shop at department stores anymore), and the high cost of labor. Macy’s is facing these challenges by narrowing its store footprint (selling off its store locations helped the firm raise $1 billion in just two years) and promoting online sales.
New initiatives the company is hoping will boost revenue include renting ground floor pop-up space to other companies. In addition, it launched a line of modest clothing, including hijabs, targeted at Muslim women — not without some backlash. We’ll have to wait and see whether these new initiatives help turn sales around.
Next: “Paying less” is not enough to keep this shoe retailer afloat.
Budget-friendly shoe retailer Payless sought Chapter 11 bankruptcy protection in April 2017, with plans to restructure debt and boost its balance sheet. It planned to close up to 800 stores. The company was the first of a crop of spring Chapter 11 filings to emerge from bankruptcy. The retailer is now working to bring “click-to-brick” and ship-to-home capabilities to its stores, CEO Mike Vitelli said.
Despite emerging from bankruptcy, the shoe store continues to struggle. It announced in January 2018 it would realign its retail organizational structure, reducing layers between its corporate headquarters and retail stores. Just how many jobs would be cut wasn’t specified.
Next: Hungry people have many sandwich options these days.
Quiznos used to be the fastest-growing restaurant chain in the country. Now it’s hard to find a place to buy one of its toasted sandwiches. While in 2007 it boasted 5,000 stores, that number has dwindled to fewer than 600 locations.
Competition with chains like Jimmy John’s and Firehouse Subs is partly to blame for the company’s fall, according to Forbes. The company has been attempting to get more return customers through its loyalty app and offering free gyros for a day. Will all this work or is Quiznos toast? Only time will tell.
Next: This production company won’t have a Hollywood ending.
15. Relativity Media
Upstart studio Relativity Media created movies like 3:10 to Yuma and Limitless, but those early successes didn’t translate into financial stability. The company emerged from a bankruptcy proceeding in 2016, but it still couldn’t find its footing. A couple of big-time flops, including Masterminds, starring Zach Galifianakis and Kristen Wiig, hurt the small studio, which also sued Netflix for supposedly trying to force it out of business, the Los Angeles Times reports.
Employees were furloughed, the CEO and founder stepped down, and the company owes nearly half-a-million dollars in back rent on its Beverly Hills office. Hollywood may love a comeback story, but the chances of a sequel for this company seem slim.
Next: This struggling health brand is on life support.
When Elizabeth Holmes claimed to have invented a new blood testing device that uses a single drop of blood to screen for hundreds of conditions, the media went gaga. The technology offered by her company, Theranos, was “mind-blowing” and would give people “an unprecedented window on their own health,” Wired gushed in a 2014 article. That year, Theranos was valued at $9 billion.
Everything was rosy until a 2015 investigation by The Wall Street Journal revealed its testing technology didn’t work. Holmes, who once topped Forbes’ list of the richest self-made women, saw her net worth estimate fall to $0. Theranos settled two lawsuits brought by a hedge fund that invested $96.1 million.
There is someone willing to help fund the beleaguered company, however. Theranos secured $100 million in debt financing in December 2017 from a New York private equity firm. This is a much-needed infusion after the company laid off more than half its workforce in 2017. The real question is whether the company can undo the damage it has garnered in the public eye.
Next: Ear piercing services aren’t enough to turn a profit.
If you surveyed American women, most would say they got their ears pierced at a Claire’s store (they claim they’ve pierced 94 million ears). But today’s tweens may have to go elsewhere for that formative experience.
The mall jewelry chain, which a private equity firm purchased in 2007, canceled its IPO and is struggling to turn a profit. Claire’s is one of many stores that CNBC predicted may go bankrupt in 2018, after the jewelry retailer received a poor rating from Moody’s.
Next: Trouble for another sandwich chain
Subway, the world’s largest restaurant chain, is in trouble, some reports say. People are looking elsewhere for healthier, fresher, and what they feel is better tasting food. Also, franchise owners are protesting the chain’s promotions (i.e., the $5 footlong deal) and food quality. The chain lost more than 900 stores in 2017 alone, with more closures likely in 2018.
And who can bring up Subway’s rocky history without mention of former spokesperson Jared Fogle, who is serving a 16-year prison term for paying for sex with minors and possessing child pornography? Whether Subway can pull itself from its current slump depends on whether it improves the quality of its food, some say.
Next: Trendsetting millennials aren’t interested in this classic jeweler.
19. Tiffany & Co.
Tiffany had a decent 2017 holiday season after a period of lackluster sales. However, the jeweler acknowledged it still had work to do. The company’s struggles also have included CEO Frederic Cumenal departing abruptly in 2017. Only 6% of Tiffany’s sales are through its website, so new CEO Allendro Bogliolo is tasked with building up e-commerce.
Bogliolo acknowledged in a sales report that the only way to reverse the overall negative sales trend is “stepping up certain strategic spending.” In addition to e-commerce efforts, the company is also investing money to refresh Tiffany’s merchandise.
Next: This popular women’s clothing retailer saw “limited” success.
20. The Limited
Teen girls from the ‘80s or ‘90s probably remember The Limited. But if they want to relive the experience, they’re out of luck, unless they want to shop online. The retailer shut down all of its 250 stores in January 2017 and filed for Chapter 11 bankruptcy soon after.
The clothing still can be purchased online. “This isn’t goodbye, the company said in a statement after shuttering its locations in malls. “The styles you love are still available online — we’re just a click away 24 hours a day.”
Additional contributions by Megan Elliott and Ali Harrison.
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