I’ve touched on the subject of economic instability time and time again and I’ve talked about the effects that will disrupt everyday life for regular citizens. As proof of the desperate financial situation the US is in, stands not only the decline in lifestyle for the average Joe, but also well established industrial giants, who took a wrong turn businesswise and might disappear completely off the face of the marketplace. As recession is hitting harder and harder everybody and everything, it takes very little to destabilize beyond repair even some of the most financially stable businesses. The point of no return can be just around the corner even for the giant brands, and not even the safest and most fail-proof business plans will be enough to pull them out of the gutter. Every year, like clockwork, the 24/7 Wall St. website calls out the “endangered businesses” in the US, based on their current financial status.
It’s not that easy to pin-point a dying investment, as company mergers will always pick up the bits and pieces; a stronger and stabile company will always take on a bankrupt business, as long as there’s a profit in it. A merged company is not exactly a dead one, but not all of the brands that find themselves with one foot in the grave will get saved. Let’s have a look at some of the brands that might disappear completely by the end of the year.
This was a 33 year old business, which merged with American Airlines, which it was struggling to stay alive. The merger was complete in 2013, and the board decided that American Airlines will most probably retain their brand, which will be added in time to the US Airways planes and equipment as well. When two companies merge, the name and brand that are best known will be kept, and considering American Airlines is the bigger brand overall, it will continue flying its flag. This is despite the fact that American Airlines was the company that was more financially unstable. The US Airways name and logo is still on some planes, buildings and equipment, but by the first half of 2017 it will have vanished completely.
This was a thriving company 10 years ago, one of the most established names on the market. The clothing retailer seems to be singing its swan song at the moment, as in October 2015 its board officially filed for Chapter 11 bankruptcy protection. The filing hasn’t been approved yet, but the reasons given for the spiraling out of control were unthinkable levels of debt, legal battles and unsatisfactory sales figures. American Apparel is not in the same league with its direct competitors as far as representation throughout the territory goes, as it only has about 130 stores in the US, compared to the 800 venues that GAP holds. The company policy is not exactly flexible, so this hurts business even more. Most fashion retailers will drop drastically prices as soon as SHTF, but American Apparel is not one of them and it doesn’t seem in a hurry to do so.
The Great Atlantic & Pacific Tea Company (A&P)
The A&P is one of the oldest and most prestigious brands in the US, which dates over 150 years ago. Despite its notoriety, the A&P filed for bankruptcy in 2010. It did so again back in the summer of 2015, but this time all the way to complete liquidation. As almost every elderly person you know, this store began losing ground some 30 years ago, because it couldn’t step up its game to counter its new rivals in the business. In the late 90s – early 2000s, as stores like Walmart grew to be larger than life, A&P venues throughout the US got reduced to only 600; a massive downgrade, considering there were about 16,000 A&P stores at one point. When the 2007 – 2008 recession hit, the company was forced to thin the employee numbers dramatically and close down a huge portion of the few stores that were left. In 2015, the Albertsons Companies brand purchased what was left of the A&P and rebranded it as ACME markets.
The electronics giant filed for bankruptcy at the beginning of 2015. Everything owned by the company went up for sale immediately, and opportunists companies seized the chance. The brand itself (the name) was sold to Standard General for $26.2 million, 1,743 stores were sold to Standard General, which rebranded about 1,435 of them to Sprint-RadioShack on April 1st 2015. It’s hard to say for how long will the new owners still cling on the RadioShack name, but it’s not a regular habit for “conquerors” to retain old brands for too long. In time, the RadioShack name will be lost and forgotten.
Companies and brands will come and go, but at the rate things seem to be going in the US lately, it appears that the number of bankrupt companies greater than the number of newly formed ones. We’re dealing with a very volatile market place in this day and age, where household names don’t stand a chance of surviving without impressive funding and flawless business strategies. Things are going from bad to worse, and commercial power seems to be getting centralized more and more with each passing year. Who knows how long until ONE company will end up owning everything… and everyone as well.
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