What brands did you grow up with? Reflecting on my childhood in the ‘90s, I can sharply recall the fast-fashion retailer Contempo Casuals, the vast electronics warehouse Circuit City and, of course, the tragic video rental titan Blockbuster. None of these brands exist today — at least, not as we once knew them. The fact that they’ve dissolved would have been difficult to forecast back then because they were so popular in their time and practically impossible to avoid if you shopped in any major mall or city center.
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Now, in the throes of a roaring pandemic, a number of other once-seemingly-invincible brands are dangling on the brink of extinction. From entertainment powerhouses to fine jewelry icons, here’s a look at 13 brands that branding and finance experts think could meet their demise this year.
“The brand that I think has a great chance to disappear in 2021 is AMC Theaters,” said RJ Huebert, managing principal, HBT Digital Consulting LLC. “They were founded in 1920 and have the largest share of the U.S. theater market, [but] 2020 absolutely destroyed the movie-going business due to necessary state-wide closures. With a slow COVID recovery in 2021, I could see them fading away. AMC has over 620 theaters in the USA; that’s a ton of building space that’s not being utilized, and effectively very little revenue coming in.”
In October, AMC Entertainment Holdings warned that it could run out of cash by the end of 2020 and that it would have to file for Chapter 11 bankruptcy if it did not obtain liquidity. The beleaguered cinema chain went on to raise $104 million after selling some 38 million of 200 million in shares. Still strapped for cash, AMC said at the end of December that it planned to raise $125 million by selling 50 million shares. In total, AMC managed to raise $204 million in December, but as of early January, CEO Adam Aron said that the company needs $750 million to survive the pandemic.
“One popular brand that could disappear in 2021 is Gap,” said Stacy Caprio, financial blogger, Fiscal Nerd. “They weren’t turning a profit in 2020 in their public balance sheets and their revenue is based heavily on retail store visits and sales, both of which have taken a sharp downturn due to COVID lockdown policies this past year. To stay in business for a long time, they will have to innovate and focus more on online than retail so they can weather unexpected storms such as the one that happened this year.”
Last April, Gap gained $2.25 billion in debt and warned that it could run out of money in the next 12 months. The casual clothing retailer also announced the suspension of rent payments for all its remaining stores, which adds another $115 million to its debt burden.
In an SEC filing, Gap stated: “We will need to take additional actions to both preserve existing liquidity and seek additional sources of liquidity, beyond our currently available cash and credit facilities within the next 12 months as existing cash and cash expected to be generated from operations may not be sufficient to fund our operations.”
Gap locations continue to shutter, most recently losing a store in Chicago’s Magnificent Mile.
A legendary American brand that has been around for more than 100 years, Harley-Davidson puts a lot of work into looking tougher than the rest, but at the end of the day, it too can crumble as consumer trends outgrow its products.
“The classic Harley-Davidson motorcycles simply do not have any of the characteristics that younger consumers are looking for these days — automation and convenience,” said Arnas Vasiliauskas, chief innovation and product officer of CarVertical. “With the rise of transportation apps, motorcycle ridership will become outdated transportation means that only older generations would likely patronize.”
Amid a rocky year that saw significant earnings loss, Harley-Davidson announced a five-year strategic plan that would entirely overhaul its business with the goal of driving profit and shareholder value.
“When Crocs came into the market, gardeners, moms, and campers loved the comfy foam footwear,” said Caroline Lee, a growth marketer and co-founder of CocoSign in Singapore. “Crocs were more durable and really needed less replacement; But now, the question arises with whether wearing Crocs will be a nightmare for your feet. The simple design makes it easy to copy, and the market is flooded with cheaper knockoffs. The company is closing several of its retail stores.”
Trouble at Crocs can be traced back to at least 2014 when the company announced plans to close 75 to 100 of its 624 stores globally and lay off 183 employees. Things continued to spiral downward for the brand, and in 2018, it closed its last manufacturing plant. But surprisingly, that wasn’t the end for Crocs — which at the time, alluded to a successful future but didn’t explain exactly how it would stay around. Forward to 2020 and the brand saw significant success through collaborations with other big-time brands like KFC. Can the brand manage to stay relevant? There’s reason to think not, but then again, as Crocs CEO Andrew Rees told Forbes last December, “If you have a brand that has a lot of haters, that makes it even more interesting to collaborate with.”
“Having declared bankruptcy in 2012, this brand’s struggle is obvious in their attempts to dabble in cryptocurrency by introducing Kodakcoin which only appeals to a specific market of photographers — those who use Kodak’s services,” Vasiliauskas said. “However, with many other electronic brands rivaling Kodak, it’s inevitable that it will not be able to bounce back from its prolonged fall from grace.”
Indeed, Kodak has been weathering some very bad storms for nearly a decade, and the brand’s transition from photography powerhouse to the new kid on the cryptocurrency block has been, to put it frankly, really weird. But this legacy brand that dates back to the 19th century is determined to survive, no matter how many business overhauls it takes. In 2020, the Trump administration tapped Kodak to produce pharmaceutical ingredients, securing a $765 million government loan to create Kodak Pharmaceuticals, which is intended to produce up to 25% of the active ingredients for generic medications in the country. So, the photography-centric Kodak we all knew growing up may be over, but it looks like there’s a booming future for a new and possibly improved pharmacy-centric Kodak.
Remember Friendster and MySpace, two early social media sites doomed to obscurity as Facebook and Twitter rose to prominence? Snapchat might be joining their ill-fated club of washed-up platforms.
“Snap’s best features have been snapped up by Instagram targeting the same audience,” said David Ciccarelli, founder and CEO of Voices.com. “TikTok is more popular with a younger audience while Facebook and LinkedIn are meeting the needs of working professionals. Snap is one platform I’ve never been able to embrace, nor has our marketing department insisted we’re present on it. That tells me something.”
In 2018, rumors circulated that Snap (owner of Snapchat) would get scooped up by Amazon or some other behemoth company by 2020. “Snap needs something,” NYU’s Nick Galloway said on Recode’s podcast Pivot in September 2018. “I believe this company is going out of business…Snap will not be an independent company by the end of 2019.”
That didn’t happen. Snap still owns Snapchat and the company doesn’t appear to be in as dire shape as it was two years ago — in 2020, it finally turned a profit, but it’s still on shaky ground. So much depends on what the people with all the power (in this case) want, do, and need. And those people are teenagers.
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2020, killjoy that it was, might have taken out Party City, the retailer whose name says it all. Launched in 1990, Party City was the ultimate last-minute go-to for special occasion staples be they paper plates or jumbo balloons, and now it’s, to quote Tampa Bays Times, “the saddest store during the pandemic.”
“In the ‘new normal’ we cannot celebrate as we usually do,” said Antonio Wells, chief strategy officer, NAMYNOT, a brand growth and strategy marketing agency based in Chicago. “Birthdays, festive holidays, graduations, weddings and even Party City’s biggest day of the year, Halloween, have all been canceled. Since the pandemic has killed most normal public gatherings, it has dampened those few celebrations that do happen. This reduced sales volume is not enough to sustain a retail franchise whose revenue derives from seasonal sales.”
But Party City was running out of steam (streamer?) even before the pandemic. In 2019, the retailer closed 45 stores due to a global helium shortage, the brand said. In its darkest hour, Party City pulled off a massive turnaround when on Jan. 4, 2021, major shareholder Clifford Sosin acquired 406,500 shares of the stock in Party City Holdco, Inc. The company’s stock soared over 24% in a week. So it looks like the party isn’t over just yet after all.
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Another legacy brand that might end up on the chopping block is J.C. Penney. The company was in bad shape even before the pandemic, but COVID-19 and its devastating effect on retail might just be the last straw.
“J.C. Penney had already had its share of tumultuousness,” said C. Street, principal at CStreet Creative. “With about 600 physical stores left standing and a primary [older] demographic who does not tend to use e-commerce as much, there could be trouble for their ability to survive 2021.”
Last May, the retailer filed Chapter 11 bankruptcy and said that it might close up to 242 stores. Then, in October, J.C. Penney was acquired by Simon Property Group and Brookfield Asset Management. Now, J.C. Penney is seeking a new CEO to replace Jill Soltau, who left the position, effective on Dec. 31, 2020.
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“One retailer that could disappear, or at least significantly fade away in 2021 is Charlotte Russe,” said Paul Z. Shelton Jr., MSF, founder and chief investment officer of Warwick Shore Advisors. “Founded in 1975, the retailer has stamped its presence on clothing, shoes and accessories targeting women in their teens and twenties. The company currently operates stores in 45 states with the majority inside of large shopping malls. Consumer traffic in these locations is significantly lower painting a negative picture for the retailer. Unfortunately, I don’t believe that consumer preference will shift in favor of Charlotte Russe.”
In February 2019, Charlotte Russe filed for Chapter 11 bankruptcy and in March, announced it would close all its 500 locations and sell its intellectual property. Then just a month later, Charlotte Russe changed its tune and said it would reopen 100 of its stores. The company followed through on its reopening but who knows how long its second act will last in this climate.
Office Depot OfficeMax
“Another brand that may not survive 2021 is OfficeDepot OfficeMax,” Street said.
“While the impact of Covid may have given OfficeDepot a slight boost due to the vast amount of people working from home and or needing additional work or school supplies, according to OfficeDepot Inc.’s annual report (ending December 2019), their stock was on a consistent decline (from $100 in Dec. 2014 to $33.53 in December 2019).”
As of January 7, shares of the ODP Corporation (parent of OfficeDepot Office Max) are priced at $37.02. “I think the uptick indicated is possibly due to the need for consumers to get supplies for working at home and or having children at home for schooling,” Street said. “I predict OfficeDepot will have to close stores and develop a robust e-commerce platform, with competitive price models, to stay afloat.”
Sears hasn’t a good year, or a good decade, really. Kenmore, its household appliance brand, has taken the brunt of the beating, going from once-revered brand to “the scrap heap” as CNN reported in 2018.
“Even during the pre-pandemic days, Sears was searching for a buyer but to no avail,” said Michael Hamelburger, CEO of The Bottom Line Group. “Then you’ve got the rivals such as Lowe’s and Home Depot that offer more affordable brands. Furthermore, we’ve had Asian brands such as LG and Samsung penetrating the US market successfully in the past five years offering more competitive technologies in their products.”
It looks like the Kenmore brand will be around as long as Sears will be around. So now, the real question is, how much longer will Sears be around?
Photo disclaimer: Kenmore is Sears’ household appliance brand.
Tiffany & Co.
“Tiffany & Co. has experienced a volatile period over the last couple of years both in company fundamentals and with regards to their acquisition by LVMH,” Shelton, Jr. said. “At the end of 2019, the luxury jewelry retailer was on the verge of losing all of its’ shine as rumors soared that the retailer was going out of business.”
Shelton went on to say that “a sparkle of hope rose when the brand announced that it was being acquired by another luxury brand for $16.2 billion dollars,” but when the COVID-19 pandemic struck, LVMH attempted to back out of the original purchase agreement.
“After a tennis match of legalities, the two companies finally agreed on terms of a new contract giving hope that the retailer will be saved,” Shelton, Jr. said. “However, there are still potential headwinds for Tiffany. The company did post record net sales in the holiday-driven 4th quarter. Much of the success is attributed to sales in China and online transactions. According to preliminary results released by the company, net sales fell in the Americas and Europe. The outperformance in the Asia Pacific theater speaks to the strategy that the brand has pursued over the last several years of increasing a presence in the region as well as through e-commerce. So, with this new strategic focus, what will the footprint of Tiffany & Co. look like in 2021?”
We’ll find out in the months to come.
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