10 Brands That Will Disappear in 2013 - My Summary of 24/7 Wall St.'s Report (Part 2)

See http://blog.uloop.com/2012/06/10-brands-that-will-disappear-in-2013-my-summary-of-247-wall-st-s-report-part-1/ for Part 1 of story.

5)  Pacific Sunwear (PacSun)

PacSun’s recent decline was a personal experience of mine.  One of their stores opened and closed within eight months in my hometown.  According to 24/7 Wall St., “Five years ago, the company’s stock traded for $23.”  It’s now around $1.50.  Problem?  Department stores can sell the same clothes for much cheaper.

4)  Research in Motion (RIM)

Apple and Google are destroying this once king of the smartphone industry.  RIM’s Blackberry products were once the talk of the town, but as stock prices have dropped from $144 four years ago to $11 recently, its disappearance is likely coming soon.

3)  Current TV

This Al Gore-led television project was doomed when it replaced Keith Olbermann with Eliot Spitzer.  Current TV’s audience has fallen enough that Time Warner Cable may discontinue carrying the channel, and it seems at this rate, Gore may not be able to keep the network afloat.

2)  Talbots

Retailer of classic women’s clothing, shoes, and accessories The Talbots is pretty much a sure goner.  It is widely accepted that it will, in the near future, be bought by Sycamore Partners for just over $2.75 a share, or $190 million.  It has suffered greatly under a combination of department stores and “niche chains” including Anne Taylor, Chico’s FAS, and Limited Brands.

1)  American Airlines (AA)

US Airways CEO Doug Parker has made it clear that he wants to buy the struggling American Airline’s assets.  Backing from American’s unions and support from bondholders and analysts alike have made the deal all but inevitable.  Merging the two airlines would protect jobs and improve US Airways position in the carrier market (it has been recently weakened by the mergers of Northwest with Delta and United with Continental).

Personal Thoughts - Even though these brands have been selected carefully and have all warranted these selections, they are by no means doomed to this estimated fate.  Last year’s list, for example, features a number of companies that refused to succumb to defeat: most notably Sears, Soap Opera Digest, Sony Pictures, and Kellog’s (all of which are doing just fine).  Some, however, fell rather quickly.  MySpace was sold by News Corp. less than a week after 24/7 Wall St. published their list, Saab filed for bankruptcy five months after, Sony Ericcson dropped the Ericcson, and Yum! Brands parted ways with A&W.

So, it’s not a sure thing, but if the companies on the list don’t act fast, their brand name could quickly go the way of the dodo bird.  In many of these cases, a sell out is the best option financially.  It comes at the cost of losing a brand name, but includes the reward of guaranteed monetary compensation.