Each year, 24/7 Wall St. creates a list of 10 well-known American brands that the site’s analysts and writers believe will die within 18 months. The list of brands with will disappear in 2013 includes brands that failed to innovate, brands that ignored competitors, and brands that lost track of what consumers actually want and need. The brands come from a variety of industries, each with its own reasons for impending death.
First, let’s take a look at the methodology 24/7 Wall St. uses to creates its annual list of brands that will die within 18 months. Brands are evaluated based on seven primary criteria:
- The brand has experienced a quick drop in sales and large losses.
- The parent company of the brand has disclosed information that the brand might go out of business.
- Fast rising costs that cannot be recouped through higher prices.
- Companies that are sold.
- Companies that go into bankruptcy.
- Companies that have lost the majority of their customers.
- Brand operations that have quickly deteriorating market share.
Here is the list of the 10 brands 24/7 Wall St. predicts will disappear in 2013:
1. American Airlines
American Airlines is one of the last big brand holdouts from the recent mergers in the airline industry. After filing bankruptcy, parent company AMR claims the airline brand will prosper in the future, but as Douglas A. McIntyre of 24/7 Wall St. explains:
“US Airways has made it clear that it wants to buy American’s assets. US Airways has much to gain from the transaction, as its position in the carrier marekt has been eroded by the mergers of Northwest and Delta and the later combination of United and Continental.”
2. Talbots
Talbots is suffering not only from the recession but also from a line of products that is outdated and out of touch with consumers. Walk into a Talbots store and it’s hard not to feel like you’ve gone back in time by a couple of decades. McIntyre writes:
“Talbots’ revenue was $2.3 billion in fiscal 2008, a figure on which it lost money. Annual sales are barely half that now. With the exception of a tiny profit last year, the retailer has lost money every year in the past five.”
3. Current TV
Current TV is Al Gore’s project, but it’s also a brand that relies heavily on celebrity brands. Without big name celebrity brands that appeal to viewers, Current TV has little chance of survival. McIntyre explains:
“Current TV was on life support even before it fired its only bankable star, Keith Olbermann. He was replaced by Eliot Spitzer. Compared to Olbermann’s March figures, Spitzer’s ratings in April were down nearly 70% according to TV audience measurement firm Nielsen.”
4. Research in Motion (RIM)
Seeing RIM on the list of brands that will die within 18 months shouldn’t be a surprise to anyone. RIM is a brand that will appear in business textbooks for many years to come as the brand that failed to innovate, keep up with competitors, and recognize consumers’ changing needs. McIntyre shares some numbers that tell the RIM story:
“The pace at which the company fell apart once the process began was even more extraordinary than its rise. Revenue and net income jumped from $6 billion and $1.3 billion, respectively, in fiscal 2008 to $20 billion and $3.4 billion in fiscal 2011. The best measurement of the swiftness of RIM’s fall is the change of its share of the U.S. smartphone market. Research group NPD recently reported that RIM’s U.S. market share was 44% in 2009 but only 10% last year. Data from research group Comscore shows that share has fallen further this year. The net effect on RIM’s stock price has been devastating, taking it down from $144 four years ago to $11 recently. RIM cannot survive as a standalone operation in the face of these trends.”
5. Pacific Sunwear
Pacific Sunwear offers “California-style” sunglasses, clothing, and other accessories. Unfortunately, they’re not distinctive and the brand is easily replaced with dozens of others. McIntyre writes:
“Why is the company in so much trouble? It is too small and is in a commoditized business. Nearly every major department store chain sells products similar to those Pacific Sunwear offers, and so do many niche retailers. Pacific Sunwear, meanwhile, has only 729 small stores.”
6. Suzuki
I’m going to hazard a guess that many people think Suzuki already died, but it’s still hanging on. An automotive brand has no chance of competing in the crowded auto market with a terrible reputation for quality — as Suzuki has. It’s even harder for a brand to succeed when it targets the lower price point, that Hyundai already owns. McIntyre explains:
“In the 2012 JD Power survey of U.S. vehicle dependability, Suzuki’s scores in power-trains, body and materials, and features and accessories were below those of almost every other brand. Most of its cars sell for less than $20,000 and its trucks and SUVs for under $25,000. Almost every other manufacturer with a broad range of vehicles has flooded this end of the market with cheap, fuel-efficient models. Arguably the most successful car company in the U.S. based on growth — Hyundai — does particularly well in this segment.”
7. Salon.com
Salon.com is a news and commentary site that launched in 1995. Over the years, it’s been outpaced by competitor sites and has lost money and traffic. The value of Salon.com, however, is in its vast content archives — something a buyer is likely to be very interested in. McIntyre writes:
“In recent years, Salon.com has been eclipsed by larger and better financed sites such as The Atlantic and Washington Post-owned Slate. Of course, today there are thousands of websites that comment on the news each day.”
8. Oakland Raiders
These days, professional sports teams in the United States show little loyalty to the local fans that support them. It’s all about where they can get the best stadium for the money, and teams could move at anytime. The Oakland Raiders is one such team, and this wouldn’t be the first time the team moved to a different city for a better stadium. McIntyre explains:
“Current team managing owner Mike Davis already has said he may move the Raiders back to LA to get a better stadium deal. The current Oakland stadium contract expires next year. Davis recently told the San Francisco Chronicle, ‘Yeah, Los Angeles is a possibility. Wherever’s a possibility. We need a stadium.'”
9. MetroPCS
Like Suzuki, MetroPCS is likely to be a brand that most consumers think is already dead. With market leaders like Verizon Wireless and AT&T and smaller players like Sprint and T-Mobile in the United States mobile carrier market, it’s nearly impossible for a brand like MetroPCS to live much longer. McIntyre shares:
“Sprint and T-Mobile both continue to struggle because of their modest subscriber bases compared to AT&T and Verizon. Each needs more customers. While MetroPCS is too small to survive on its own, its buyout would give either company the additional customer critical mass it needs.”
10. Avon
Avon might be struggling as far as investors are concerned, but this brand has a huge amount of equity. Letting it die would be a waste, which is why a takeover is more likely. McIntyre explains:
“The market has no confidence in Avon, but with its brand and revenue, it is an ideal takeover target.”
What do you think of the 24/7 Wall St. list of brands that will disappear in 2013? Do you agree? Which brands do you think should or should not have made the list? Leave a comment and share your opinion.
Image: stevenafc
Susan Gunelius is the author of 10 marketing, social media, branding, copywriting, and technology books, and she is President & CEO of KeySplash Creative, Inc., a marketing communications company. She also owns Women on Business, an award-wining blog for business women. She is a featured columnist for Entrepreneur.com and Forbes.com, and her marketing-related articles have appeared on websites such as MSNBC.com, BusinessWeek.com, TodayShow.com, and more.
She has over 20 years of experience in the marketing field having spent the first decade of her career directing marketing programs for some of the largest companies in the world, including divisions of AT&T and HSBC. Today, her clients include large and small companies around the world and household brands like Citigroup, Cox Communications, Intuit, and more. Susan is frequently interviewed about marketing and branding by television, radio, print, and online media organizations, and she speaks about these topics at events around the world. You can connect with her on Twitter, Facebook, LinkedIn, or Google+.
To me , Susan, what’s interesting is not so much that the list of names changes, but that the reasons for decay never seem to change. Brands lose relevance – and the death spiral begins. For some, the crash takes weeks, for others it takes years. The reasons why they’ve become irrelevant may vary – arrogance, lack of pace, inability to adapt, complacency etc – but ultimately if you don’t give people reasons to keep buying from you, they won’t. The second half of your headline says it all.