These Struggling American Companies Might Not Make it Through 2019
Nothing is permanent, and that’s especially true in retail business. Sears seemed like it would be around forever, but now it’s a dying store on its last legs. Toys R Us closed up shop in 2018, and even though the signs point to it coming back, the store won’t be quite the same. These struggling American companies could soon follow dodo birds and rotary phones into extinction.
You’ve probably heard of most of the stores (including the established department store at No. 11) on our struggling companies list, but a couple (such as the company at No. 9) have a lower profile.
1. 99 Cents Only Stores
What to know: Nearly $70 million in losses in 2018.
The crowded and competitive bargain retail space is making life tough on 99 Cents Only Stores. Dollar Tree, Dollar General, and Walmart are stores competing with 99 Cents Only Stores. The company hemorrhaged money throughout 2018, and even though the doors aren’t closed yet, this retailer might not survive to see the end of 2019.
Next: Fashion flop
What to know: Spent $65 million to ditch physical retail spaces.
Bebe planned to close a handful of stores, and that turned into a total exit from physical retail spaces. Breaking the leases cost roughly $65 million, according to Retail Dive, and even though it saves money in the long run, it might not help. Saving money on rent helps the bottom line, but slowing sales make Bebe one of the struggling American companies.
Next: Knick-knacks aren’t good for business.
What to know: Brookstone is closing all 102 mall stores.
The go-to store for massage chairs and sunglasses that take photos won’t be around much longer. As it turns out, selling knick-knacks and non-essential items isn’t good for business. Moneywise reports the company is closing all 102 mall stores, though some airport locations will remain.
Next: Three reasons this store makes the struggling companies list.
4. The Container Store
What to know: Layoffs boosted earnings, but that won’t help in the long run.
We can pinpoint three reasons The Container Store is one of the struggling American companies:
- First, you can find storage bins and ers in most department stores and online, so people don’t need a store dedicated to those products.
- Also, as people try minimalism and streamline their stuff, they don’t need more storage solutions.
- Finally, massive layoffs are part of the reason the company turned a profit in 2017, according to MarketWatch. Cutting staff is not a sustainable plan for any retailer.
Next: It’s only a matter of time.
What to know: Fitbit needs a major innovation to keep up in the wearable tech space.
The improvements with each generation of the Apple Watch aren’t helping Fitbit’s cause. Experts at Barron’s say it’s unlikely the company will turn a profit any time soon, and it’s going to be burning through its cash reserves in the meantime. That’s not a good combination, which is one reason why it’s one of the struggling American companies.
Next: A small fish in a big pond might not survive much longer.
6. Fred’s Pharmacy
What to know: Fred’s has one of the worst credit ratings possible.
Fred’s is a small fish in a big pond, and Walgreens, CVS, and Rite Aid are the apex predators, so to speak. It sold part of the business to CVS, sales slipped by 4%, losses doubled to nearly $140 million, and it has one of the worst Credit Risk Monitor ratings possible, according to Retail Dive.
Next: Nothing is going right for this struggling company.
What to know: Three CEOs in two years and shrinking sales hurt GNC.
No matter how you look at it, GNC is one of the dying retail stores that might not survive much longer. The company had three CEOs leading the way over a two-year span. Revenue dipped more than 3% in 2017, and sales declined through 2018. A Chinese company grabbing a 40% stake in the company is promising, but GNC has a terrible Credit Risk Monitor score that pegs the chance of bankruptcy at up to 50%.
Next: Heading in the wrong direction.
What to know: GoPro stock prices are plummeting.
We discussed Fitbit and it issues a few minutes ago, and GoPro suffers the same problems. The company’s products aren’t drastically different from what it offered a few years ago, and competitors are covering the same ground just as well. Add in flat profits and plummeting stock prices (from more than $93 a share in 2014 to less than $7 in late 2018), and you can see why it’s a struggling American company heading in the wrong direction.
Next: A low-profile company that’s in trouble.
What to know: This pharmaceutical company is banking on one major product.
Immunomedics maintains a low profile compared to some of the other companies on our list, but it’s in just as much trouble. It’s burning through $30 million in cash each quarter, according to InvestorPlace, and stockholders are on the hook for a large part of the losses.
The worst part, however, is Immunomedics selling the royalty right for one medication in the hopes it can fund development of another product and make money from that. It’s a risky gamble that might not pay off for the company.
Next: This is one of the struggling American companies, but there’s a silver lining.
10. J. Crew
What to know: The brand had $2 billion in debt on the books in 2017.
No matter what it does, J. Crew remains one of the fashion retailers failing to attract customers. It had $2 billion in debt in 2017 after it attempting to go upscale, but the silver lining is revenues rose slightly in the second quarter of 2018, declining sales flattened out, and operating losses were negligible. Plus, the Madewell brand owned by J. Crew is raking in the money like never before. Still, J. Crew might not survive through 2019, at least not the way we know it now.
Next: An established department store is one of our struggling American companies.
11. Neiman Marcus
What to know: Its debt load and sales are virtually the same.
Neiman Marcus opened in 1907, so there’s no doubt it’s a well-established retailer. Unfortunately, it’s also one of our dying retailers. Aside from the fact it’s struggling to attract new customers, a proposed merger derailed because of Neiman’s $4.9 billion worth of debt. The debt is greater than the declining sales that totaled $4.7 billion in 2017, which is why we classify it as one of the dying retail stores.
Next: You might not recognize this company in a few years.
12. Office Depot
What to know: Office Depot is shifting its strategy from retail to services.
This company’s retail sales keep declining, so it’s no stretch to say it will probably disappear soon, at least in the form we know it. Business-to-business services, such as IT, accounting, marketing, and legal advice, account for roughly 14% of the sales, a number that’s likely to grow. In a few years, you won’t recognize Office Depot unless you’re shopping for services to help your business.
Next: A presidential policy is making life tough for this company.
13. Pier 1
What to know: Pier 1’s net losses are nine times higher in 2018.
Selling home goods is a tough way to carve out market space, what with Target, Walmart, and other mammoth retailers doing the same thing. However, tariffs in Donald Trump’s trade war with China aren’t helping either. Nearly 50% of Pier 1’s sales are subject to the 10% tariff. Put it together, and that’s how net losses increased from $3 to $28.5 million midway through 2018. Unless the company puts it all together, it’s one of the struggling American companies that might not see the end of 2019.
Next: A company with $950 million in debt.
What to know: The company filed for bankruptcy in 2018.
Remington’s business centers around making and selling firearms, which turns off investors in the wake of multiple school shootings. Not only that, but America’s oldest gun company filed for bankruptcy in 2018 after seeing sales decline 30%, having a $28 million operating loss, and with $950 million in debt on the ledger.
Next: One struggling American company in charge of several dying retail stores.
15. Southeastern Grocers
What to know: Thin profit margins make it hard to wipe out $1 billion in debt.
You might not know Southeastern Grocers, but you might know some of the struggling American companies under its umbrella. The company operates stores such as Bi-Lo, Winn-Dixie, and Fresco y Mas. The private company carries $1 billion in debt, and it explored bankruptcy in 2017 to refinance those obligations, according to Winsight Grocery Business. Grocery stores operate with some of the slimmest margins, so overcoming that kind of debt is easier said than done.
Check out The Cheat Sheet on Facebook!