Michael B. Sauter and Evan Comen Thu, Dec 22 3:00 AM PST
Each year, 24/7 Wall St. identifies 10 American brands that we predict will disappear in the coming year -- either due to bankruptcies, mergers, discontinuation, or rebranding. The majority of these cases represent some failure, either in company or brand, and often in both. Some of the brands on this list are already certain to disappear, with just the last remnants left to dissolve next year. Others are on a trajectory to vanish, but their final fates will depend on what happens next year.
ALSO READ: American Cities Adding the Most Jobs
The best brands have staying power and can weather major changes in the company that owns it. People will continue to follow a sports team through generations, even if the players, management, and even home city change. When companies merge, the new parent company will often opt to keep the strongest and most successful brands intact.
When a company opts to abandon a major, long-standing brand, it is usually a sign of long-term decline or failure bad enough to necessitate starting over or pulling the plug. That was certainly the case for Time Warner Cable, which, after the completion of a merger with Charter Communications, joined Charter in rebranding as Spectrum. Although Time Warner Cable was one of the biggest brand names in America, the company was notorious for its poor customer service. The new corporation was likely trying to distance itself as much as possible from that reputation.
Bankruptcy is the most common reason for brands to vanish, and many of the companies on this list will disappear next year for this reason. Retailer Sports Authority declared bankruptcy this year and liquidated its assets. Another retailer, The Limited, has been driven to the brink by the growth of e-commerce and declining shopping mall traffic, and appears likely to go bankrupt in the next year as well.
Outright failure of brand or company is not always the reason for a major name to vanish. For example, in the cases of Scottrade, which was purchased by TD Ameritrade, and Virgin America, bought by Alaska Airlines, the acquiring companies may have the better brand name. While a decision has not yet been reached in either case, Scottrade and Virgin America may dissolve into the brands that acquired them.
1. Virgin America
Alaska Airlines announced in April 2016 that it would acquire Virgin America, combining to create the fifth largest airline company in the United States. While the deal was officially completed in December, Alaska has yet to decide whether it will continue to operate the two airlines as separate brands or fold the Virgin brand into the Alaska Airlines brand. The company is currently conducting market research within its customer base to find how valuable the Virgin brand is among Alaska customers. It will make an announcement on the matter early next year.
If Alaska Airlines were to discontinue Virgin, it would be the latest in a series of brand consolidations in the airline industry. Each of the four main U.S. carriers today -- American, Delta, United, and Southwest -- who collectively control more than 80% of the market, has expanded by acquiring an airline and absorbing its brand. Northwest Airlines, Continental Airlines, and US Airways were each bought by one of these main airline carriers in the last 10 years. Alaska Airlines also recently discontinued an airline brand. After purchasing Horizon Air in 1986 and operating it under a distinct identity for 25 years, Alaska subsumed the brand in 2011. While Virgin has a more loyal and widespread customer base than Horizon Air, Alaska may drop its new brand and join the industry-wide trend of airline brand consolidation.
ALSO READ: America's Fastest Growing Beer Brands
2. Dodge Viper
Auto manufacturers often benefit from the strength of the some of their most well-known and long-running brands. This list would include cars like the Toyota Camry, the Ford F-150, and the Honda Accord. While it might not quite be at this level of brand name recognition, the 25-year old Dodge Viper is one of the biggest names in sports cars -- and it will soon be a thing of the past. Introduced as a concept car in 1989, many considered the Viper to epitomize the American sports car. During Chrysler's bankruptcy in the midst of the Great Recession, the carmaker stopped production on the Viper with the 2010 model year, but reintroduced it just three years later. With a price tag suited to sports car enthusiasts with money to burn -- the most recent models have an MSRP greater than $80,000 -- the car was never meant to have sales in the same magnitude as mass market vehicles. However, while the car sold well over 1,500 units annually in the U.S. in the early 2000s, the highest single-year total in U.S. sales since its reintroduction was 760 in 2014. Through the first 11 months of 2016, Chrysler sold just 571 Vipers in the U.S. and 48 in Canada. In June, the company announced that the 2017 model year would be the Viper’s last, and that production would end next year.
3. Scottrade
In October 2016, TD Ameritrade and Toronto-Dominion Bank announced that it would purchase Scottrade for $4 billion. Based in St. Louis, the discount brokerage has been operating since 1980. Compressed margins in the industry are likely the main reason for the merger. The combined company will have more than 10 million accounts and nearly $1 trillion in assets. Speaking to the St. Louis Post-Dispatch after the agreement, Scottrade founder and CEO Rodger Riney explained the business has become very competitive and how larger scale would help lower costs. In a letter to customers, Scottrade President Peter deSilva explained that the core business and network would remain in place. What is less clear is whether the Scottrade name will remain. One strong indication that it may be the last days for the brand is that the Scottrade Center in St. Louis -- home of the National Hockey League’s St. Louis Blues -- will change its name to the TD Ameritrade Center.
4. Pebble
Pebble is the story of a Silicon Valley startup that beat Apple, Google, and other competitors in creating a smartwatch, only to eventually lose the market entirely. In April 2012, Pebble launched a Kickstarter campaign that raised more than $10 million in just a month, the most funded such campaign at the time. Pebble's first watch, the first of its kind to run on iOS or Android platforms, was launched in 2012, far ahead of major competitors. When Apple eventually released the Apple Watch in April 2016, it appeared that the increased interest in smartwatches might drive up demand for Pebble, which were a cheaper alternative. Sales initially spiked but eventually plummeted. In March, in the midst of tanking sales, the company laid off one-quarter of its existing staff. Pebble’s fate was sealed this year after it was acquired in December by competitor Fitbit for $40 million. The company is no longer manufacturing or selling its devices, but Pebble devices can still be purchased through third-party vendors. That will likely become much harder through 2017.
5. Theranos
Consumer health care technology company Theranos raised more than $400 million in funding and had a valuation of $9 billion in 2014. The company was poised to revolutionize the health care industry, and its founder Elizabeth Holmes was hailed as the next Steve Jobs. The company’s flagship product, the Edison device, could draw and test blood in a single finger prick. In a series of investigative reports by The Wall Street Journal assessing the accuracy of the blood tests, however, the Edison devices were found to be faulty. Theranos voided the tens of thousands of blood tests administered in 2014 and 2015, and Holmes’s net worth fell from $4.5 billion -- her 50% stake in the company -- to nothing.
Theranos has been hit with multiple lawsuits in the wake of the WSJ revelations. In November, Walgreens sued the company for $140 million on the grounds that Theranos misrepresented the efficacy of its technology. Walgreens was Theranos’s biggest partner before the scandal, offering blood testing services at 40 now-closed Theranos Wellness Centers in Walgreens locations throughout Arizona. Multiple solo investors, many of whom invested more than $100 million in the company, have also sued Theranos. In addition, patients who suffered heart attacks or other medical issues after receiving normal blood test results from Theranos have also filed multiple lawsuits against the company. The company’s future is bleak in the face of so many lawsuits. Additionally, Holmes is barred from owning or operating a medical laboratory for two years.
Each year, 24/7 Wall St. identifies 10 American brands that we predict will disappear in the coming year -- either due to bankruptcies, mergers, discontinuation, or rebranding. The majority of these cases represent some failure, either in company or brand, and often in both. Some of the brands on this list are already certain to disappear, with just the last remnants left to dissolve next year. Others are on a trajectory to vanish, but their final fates will depend on what happens next year.
ALSO READ: American Cities Adding the Most Jobs
The best brands have staying power and can weather major changes in the company that owns it. People will continue to follow a sports team through generations, even if the players, management, and even home city change. When companies merge, the new parent company will often opt to keep the strongest and most successful brands intact.
When a company opts to abandon a major, long-standing brand, it is usually a sign of long-term decline or failure bad enough to necessitate starting over or pulling the plug. That was certainly the case for Time Warner Cable, which, after the completion of a merger with Charter Communications, joined Charter in rebranding as Spectrum. Although Time Warner Cable was one of the biggest brand names in America, the company was notorious for its poor customer service. The new corporation was likely trying to distance itself as much as possible from that reputation.
Bankruptcy is the most common reason for brands to vanish, and many of the companies on this list will disappear next year for this reason. Retailer Sports Authority declared bankruptcy this year and liquidated its assets. Another retailer, The Limited, has been driven to the brink by the growth of e-commerce and declining shopping mall traffic, and appears likely to go bankrupt in the next year as well.
Outright failure of brand or company is not always the reason for a major name to vanish. For example, in the cases of Scottrade, which was purchased by TD Ameritrade, and Virgin America, bought by Alaska Airlines, the acquiring companies may have the better brand name. While a decision has not yet been reached in either case, Scottrade and Virgin America may dissolve into the brands that acquired them.
1. Virgin America
Alaska Airlines announced in April 2016 that it would acquire Virgin America, combining to create the fifth largest airline company in the United States. While the deal was officially completed in December, Alaska has yet to decide whether it will continue to operate the two airlines as separate brands or fold the Virgin brand into the Alaska Airlines brand. The company is currently conducting market research within its customer base to find how valuable the Virgin brand is among Alaska customers. It will make an announcement on the matter early next year.
If Alaska Airlines were to discontinue Virgin, it would be the latest in a series of brand consolidations in the airline industry. Each of the four main U.S. carriers today -- American, Delta, United, and Southwest -- who collectively control more than 80% of the market, has expanded by acquiring an airline and absorbing its brand. Northwest Airlines, Continental Airlines, and US Airways were each bought by one of these main airline carriers in the last 10 years. Alaska Airlines also recently discontinued an airline brand. After purchasing Horizon Air in 1986 and operating it under a distinct identity for 25 years, Alaska subsumed the brand in 2011. While Virgin has a more loyal and widespread customer base than Horizon Air, Alaska may drop its new brand and join the industry-wide trend of airline brand consolidation.
ALSO READ: America's Fastest Growing Beer Brands
2. Dodge Viper
Auto manufacturers often benefit from the strength of the some of their most well-known and long-running brands. This list would include cars like the Toyota Camry, the Ford F-150, and the Honda Accord. While it might not quite be at this level of brand name recognition, the 25-year old Dodge Viper is one of the biggest names in sports cars -- and it will soon be a thing of the past. Introduced as a concept car in 1989, many considered the Viper to epitomize the American sports car. During Chrysler's bankruptcy in the midst of the Great Recession, the carmaker stopped production on the Viper with the 2010 model year, but reintroduced it just three years later. With a price tag suited to sports car enthusiasts with money to burn -- the most recent models have an MSRP greater than $80,000 -- the car was never meant to have sales in the same magnitude as mass market vehicles. However, while the car sold well over 1,500 units annually in the U.S. in the early 2000s, the highest single-year total in U.S. sales since its reintroduction was 760 in 2014. Through the first 11 months of 2016, Chrysler sold just 571 Vipers in the U.S. and 48 in Canada. In June, the company announced that the 2017 model year would be the Viper’s last, and that production would end next year.
3. Scottrade
In October 2016, TD Ameritrade and Toronto-Dominion Bank announced that it would purchase Scottrade for $4 billion. Based in St. Louis, the discount brokerage has been operating since 1980. Compressed margins in the industry are likely the main reason for the merger. The combined company will have more than 10 million accounts and nearly $1 trillion in assets. Speaking to the St. Louis Post-Dispatch after the agreement, Scottrade founder and CEO Rodger Riney explained the business has become very competitive and how larger scale would help lower costs. In a letter to customers, Scottrade President Peter deSilva explained that the core business and network would remain in place. What is less clear is whether the Scottrade name will remain. One strong indication that it may be the last days for the brand is that the Scottrade Center in St. Louis -- home of the National Hockey League’s St. Louis Blues -- will change its name to the TD Ameritrade Center.
4. Pebble
Pebble is the story of a Silicon Valley startup that beat Apple, Google, and other competitors in creating a smartwatch, only to eventually lose the market entirely. In April 2012, Pebble launched a Kickstarter campaign that raised more than $10 million in just a month, the most funded such campaign at the time. Pebble's first watch, the first of its kind to run on iOS or Android platforms, was launched in 2012, far ahead of major competitors. When Apple eventually released the Apple Watch in April 2016, it appeared that the increased interest in smartwatches might drive up demand for Pebble, which were a cheaper alternative. Sales initially spiked but eventually plummeted. In March, in the midst of tanking sales, the company laid off one-quarter of its existing staff. Pebble’s fate was sealed this year after it was acquired in December by competitor Fitbit for $40 million. The company is no longer manufacturing or selling its devices, but Pebble devices can still be purchased through third-party vendors. That will likely become much harder through 2017.
5. Theranos
Consumer health care technology company Theranos raised more than $400 million in funding and had a valuation of $9 billion in 2014. The company was poised to revolutionize the health care industry, and its founder Elizabeth Holmes was hailed as the next Steve Jobs. The company’s flagship product, the Edison device, could draw and test blood in a single finger prick. In a series of investigative reports by The Wall Street Journal assessing the accuracy of the blood tests, however, the Edison devices were found to be faulty. Theranos voided the tens of thousands of blood tests administered in 2014 and 2015, and Holmes’s net worth fell from $4.5 billion -- her 50% stake in the company -- to nothing.
Theranos has been hit with multiple lawsuits in the wake of the WSJ revelations. In November, Walgreens sued the company for $140 million on the grounds that Theranos misrepresented the efficacy of its technology. Walgreens was Theranos’s biggest partner before the scandal, offering blood testing services at 40 now-closed Theranos Wellness Centers in Walgreens locations throughout Arizona. Multiple solo investors, many of whom invested more than $100 million in the company, have also sued Theranos. In addition, patients who suffered heart attacks or other medical issues after receiving normal blood test results from Theranos have also filed multiple lawsuits against the company. The company’s future is bleak in the face of so many lawsuits. Additionally, Holmes is barred from owning or operating a medical laboratory for two years.
