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Author Topic: Business Death Watch - 10 companies that might not make it in 2011  (Read 1994 times)
kwellada
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« on: January 23, 2011, 08:02:28 AM »

http://www.dailyfinance.com/story/investing/10-american-companies-that-will-disappear-in-2011/19798647/

The article lists ten big companies that aren't looking so hot for surviving 2011.  Of course, there is the obligatory airline:

Quote
Frontier Airlines
The carrier is owned by Republic Airways Holdings and was bankrupt when Republic bought it in 2009. Republic recently merged another of its holdings, Midwest Air, into Frontier. Denver-based Frontier is simply too small to compete in the domestic carrier market -- which has become increasingly dominated by large airlines that are growing due to mergers.

Wall Street has also become increasingly worried about Republic's future. Its shares are down 13% over the last quarter, while shares in rival JetBlue are up 9% during the same time frame. Frontier's Milwaukee hub, which serves the East and Midwest, and its Denver hub, which serves the West, the South, and Mexico, would be valuable to a larger carrier. Airline mergers and buyouts like the Continental/United deal and Delta's takeover of Northwest are popular in the industry because they allow for personnel reductions and route cuts -- as well as trimming the number of aircraft that have to be maintained. Two airlines together can have a better margin than separately. Frontier is a buyout target; its brand is not.

Also on the list is Office Depot, which is a shame because they're not bad for a big box store.  I like their sales...but then again, their big sales lately are probably to draw customers in out of desperation.  Either way, I did get a nice computer desk for half off.  Another about to fail is Borders, which is better to see fail than a local independent bookstore.

And the E-trade baby might vanish this year.
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RVideo
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« Reply #1 on: January 23, 2011, 09:29:04 AM »

Borders has a return-on-equity valuation of about -52.  In contrast, Barnes and Noble has a return-on-equity of +4 and change.
The difference between these two is that Barnes And Noble has heavily invested in the ebook market, and even have their own special e-reader device.  While Borders has *just recently* figured this out and is now selling a decent variety of ebook readers, their online store is not doing well (how can they compete with Amazon?).  They adjusted to the market too little, too late, which is sad to be sure.  They do have nice cozy stores.

As the economy worsens, people are going to turn to cheaper alternatives for entertainment.  While print markets are declining faster than ever, ebooks are actually doing quite well, in particular Amazons ebooks and B&N's store (Sonys ebookstore is not doing well due to poor selections).  It is difficult to justify a $21.99 NYT Bestseller when you are scraping by financially and the same book can be bought for $8.50 on the Kindle Store.

This is one point of which I strongly disagree with Jim.  While he envisions a return to the glorious-days-of-yesteryear when print media was king, I believe that the major publishing houses are going to undergo a radical re-shaping just as the music industry has in response to the advent of the MP3 and the iPod (seriously, who the hell buys a CD any more?)

« Last Edit: January 23, 2011, 09:35:43 AM by RVideo » Logged
Dave
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« Reply #2 on: January 23, 2011, 10:17:46 AM »



(seriously, who the hell buys a CD any more?)



Sony to close major CD plant as demand for physical media dries up


Quote
No matter how many protestations the music and film industry make, the rise of services like iTunes, Netflix, Hulu and Xbox Live Arcade are all you need to prove that optical media is sounding its death knell.
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archi-tar-tar
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« Reply #3 on: January 23, 2011, 02:12:04 PM »

(seriously, who the hell buys a CD any more?)


I still buy records.  Does that count?
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mhelie
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« Reply #4 on: January 23, 2011, 04:18:17 PM »

(seriously, who the hell buys a CD any more?)


I still buy records.  Does that count?

You just can't get the warm, cozy sound of a CD on iTunes. It's just not the same.
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mhelie
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« Reply #5 on: January 23, 2011, 04:22:10 PM »

By the way I can't wait for the sequel to You've Got Mail where Meg Ryan dumps Tom Hanks because his megabookstore closed down and then she falls in love with an internet entrepreneur.

It was heralded by the title!
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kwellada
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« Reply #6 on: January 23, 2011, 05:01:48 PM »

I haven't bought a CD in ages.  I used to have well over 2000 at one point. 

"The Kids" are still buying vinyl and there seemingly a bigger demand than ever for it.  The band I work for is doing vinyl/digital releases only and I get emails worldwide for people trying to get a copy of the vinyl, which is in limited pressings.  They actually created a demand with scarcity, despite the ease of just going to Amazon or their merch site to download it. 

Ironically, as much as I love having my collection in digital form (believe me, it's very handy when you have to move all your belongings in a small car), I *hate* digital books.  I can't even fathom having a kindle.  Maybe I'll stop being a fuddy duddy at some point, but I really do love curling up with a book made from dead trees. 
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The St.Paulite
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« Reply #7 on: January 23, 2011, 05:50:47 PM »

First of all, I think I purchased a CD in 2007 (maybe?) ... and by then, I had dropped from purchasing about 20 per year to around 1 or 2. Now, the number is 0.

Secondly, my feelings about these 10 possible collapses are mixed ... On one hand, I say "screw Borders, Office Depot, etc." ... Most are big box stores that were merely financially fueled by the credit-craze (and that I never or hardly visited). On the other hand, if these companies collapse, it will likely lead to more consolidation of power within these markets and hurt competition.

*add*
And, yes, job loss is terrible.
« Last Edit: January 23, 2011, 06:09:21 PM by The St.Paulite » Logged

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kwellada
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« Reply #8 on: January 23, 2011, 06:04:54 PM »

Here in Olympia it is already impossible to find jobs and putting all the Borders and Office Depot workers into the job market isn't going to make it any easier for anyone. 
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mhelie
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« Reply #9 on: January 23, 2011, 07:38:51 PM »

On the other hand, if these companies collapse, it will likely lead to more consolidation of power within these markets and hurt competition.


What's the point of competition when there are no customers?
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Andrew
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« Reply #10 on: January 23, 2011, 11:59:28 PM »

Borders has a return-on-equity valuation of about -52.  In contrast, Barnes and Noble has a return-on-equity of +4 and change.
The difference between these two is that Barnes And Noble has heavily invested in the ebook market, and even have their own special e-reader device.  While Borders has *just recently* figured this out and is now selling a decent variety of ebook readers, their online store is not doing well (how can they compete with Amazon?).  They adjusted to the market too little, too late, which is sad to be sure.  They do have nice cozy stores.

As the economy worsens, people are going to turn to cheaper alternatives for entertainment.  While print markets are declining faster than ever, ebooks are actually doing quite well, in particular Amazons ebooks and B&N's store (Sonys ebookstore is not doing well due to poor selections).  It is difficult to justify a $21.99 NYT Bestseller when you are scraping by financially and the same book can be bought for $8.50 on the Kindle Store.

This is one point of which I strongly disagree with Jim.  While he envisions a return to the glorious-days-of-yesteryear when print media was king, I believe that the major publishing houses are going to undergo a radical re-shaping just as the music industry has in response to the advent of the MP3 and the iPod (seriously, who the hell buys a CD any more?)



I still want to buy hard copies of things, books, magazines & so forth.

In transit, Andrew
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« Reply #11 on: January 24, 2011, 12:50:00 AM »

http://www.agoracosmopolitan.com/home/Frontpage/2011/01/21/03541.html

Zellers: U.S. take-over of Canada continues with Target deal

... 
 
Zellers' motto has been that it is "Truly Canadian". But corporate apparent corporate mercenaries at HBC has apparently sought to sell out Canada further down the road of being a colony of the United States through so-called "North American Union".

The question is, how many people in Canada actually care that our business heritage that is about of our cultural identity is being replaced by iconic symbols of corporate America and its excesses?

CBC reports that "U.S. retailer Target said Thursday it is buying the store leases of Canadian discount retail chain Zellers from the U.S. investor who owns the Hudson's Bay Co. assets for $1.8 billion."

"Under terms of the deal, Minneapolis-based Target will make two payments of $912.5 million in cash, in May and September 2011, to acquire the leasehold interests of 220 Zellers locations in Canada."

The Zellers locations will continue to exist under that brand name for "a period of time," HBC said in a release. But Target will convert 100 to 150 of those Zellers locations to Target stores in 2013 and 2014 and sell the rest of the current Zellers network of store leases to other retailers.

But the fate of the 70-odd Zellers stores that aren't destined to become Targets is far from clear. "The company still has plans to operate a portfolio of Zellers stores in some communities across the country," HBC spokeswoman Freda Colbourne told The Canadian Press.

"The company is still going to run a chain of Zellers stores, it just might be a little bit different than today, but for the next 12 months nothing is changing," Colbourne said.

...
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whipstock
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« Reply #12 on: January 24, 2011, 03:37:37 AM »

Interesting spin on the facts with that link.  Zellers stopped being Canadian once HBC was sold back in 2006.  http://www.cbc.ca/money/story/2006/01/26/bay-060126.html

HBC is simply selling a money loosing division. Target has stated that they want the locations of Zellers and not much else. 

The giant corporations are evil, wherever their corporate office is located. As Mhelie pointed out, it doesn't really matter who is selling if there isn't anyone left to buy.
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Andrew
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« Reply #13 on: January 24, 2011, 04:53:49 AM »

Interesting spin on the facts with that link.  Zellers stopped being Canadian once HBC was sold back in 2006.  http://www.cbc.ca/money/story/2006/01/26/bay-060126.html

HBC is simply selling a money loosing division. Target has stated that they want the locations of Zellers and not much else.  

The giant corporations are evil, wherever their corporate office is located. As Mhelie pointed out, it doesn't really matter who is selling if there isn't anyone left to buy.

HBC is an old company, they've been in business since 1670.  http://en.wikipedia.org/wiki/Hudson's_Bay_Company

In transit, Andrew
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GraniteCountertop
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« Reply #14 on: January 24, 2011, 06:40:42 PM »

Here in Olympia it is already impossible to find jobs and putting all the Borders and Office Depot workers into the job market isn't going to make it any easier for anyone. 
It goes back to overpopulation. Everything does. There are too many people for the planet to support, most of them are unnecessary in a healthy ecosystem and natural forces will eventually force a die-off. We can continue to monkey around with the fundamentals vial our artificial levers of technology and credit, but the immutable law of nature will catch up to us just like they do with every other animal on the planet.

We sucked a lot of fossil fuels out of the ground which led to an unnatural population explosion, pollution explosion, credit explosion, wealth explosion, and now it's declining, and soon will be gone. Basically, the ultra wealthy .02% ers will be just fine, they always are, and everyone else will be in severe peril. I expect to see a 40% die-off in global population in the next decade. And the brutal, unpleasant truth is that it is the one event that will actually preserve the planet.   
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