Welcome to Top10Archive!
Whether due to bad decisions, lack of continued public interest, or economic turmoil, some
companies, regardless of how long they’ve been around, wind up taking a dive.
Utilizing a mix of trends and the Altman Z-Score, a figure based on working capital, retained
earnings, and other factors against total assets and liabilities, this Archive compiles
the top 10 companies the general public has known and loved that are likely to soon disappear.
10.
J.C. Penney Company From stirring up controversy with One Million
Moms for featuring an openly gay spokesperson to facing backlash in the form of a 25% decrease
in sales for openly advertising same-sex marriage, J.C. Penney has had a rough go of things over
the past five years.
Despite 90 store closings, there was no rebounding, but a 4.5% increase in sales from 2015 to
2016 provided some light at the end of the tunnel.
Sadly, that light is dimmed by the grim reality that any rebound still leaves the company’s
numbers paling in comparison to 2006, the last time it had roughly the same number of
stores.
Though its stock peaked in the 1st quarter of 2016, prices are slowly returning to those
abysmal figures; and with an Altman-Z Score of .80, J.C. Penney has the potential of being
another casualty of the times.
9.
New York & Company, Inc.
When there’s little hope for an upswing in a company’s future, they’ll often turn
to tell-tale actions that signify business isn’t quite booming.
For New York & Company clothing retailer, those actions included announcing upwards
of 12 store closings and the conversion of 50 current locations into outlet markets.
The New York-based retailer faced backlash from an emphasis on bargain shopping, which
caused a drastic drop in stock pricing in 2009 from $15 per share down to around $5
per share.
Since then, the company has struggled to break even $4 per share, with its peak in 2016 only
hitting $3.75.
3rd quarter sales in 2016 came in at a .7% decrease.
While higher-ups are focusing on a means of salvaging the numbers, expectations for the
4th quarter included a continued decrease in net sales.
8.
Isle of Capri Casinos Inc.
In August of 2015, the chain announced the closing of one of its oldest casinos in Natchez,
Mississippi, leading to a sharp drop in stock pricing in the 4th quarter of 2015.
Though it saw an increase in net income in the 2nd quarter of 2016, there was still a
1% decrease in revenue when compared to a year prior.
As of September of 2016, the Reno, NV-based Eldorado Resorts announced plans to purchase
the Isle of Capri casinos, and though that reveal boosted stock pricing from a low of
$11 to over $20 per share, it’s not a finalized acquisition and, as history has shown us,
anything can happen.
Even with the acquisition looming, the fate of the Isle of Capri Casino chain is a gamble
the house may not want to bet on.
7.
Supervalu Inc Supervalu Inc, a large food distributor and
blanket corporation for Cub Foods, Shoppers Food Warehouse, Shop ‘n Save, and a range
of other supermarkets, faces hard times with a calculated Altman Z-Score of -1.43 as of
June 2016.
The closing of 60 stores in 2012, the sale of one of its larger chains, Save-A-Lot, for
$1.365 billion and drastic drops in stock prices at the tail end of April 2015 and January
2016 all spell an uncertain future for this once-popular grocery chain.
Though stock pricing was affected slightly by the Save-A-Lot sale, the grocer has been
unable to break its stock price high for 2016, which was just under $6 per share in April.
6.
TripAdvisor TripAdvisor is a fine source for looking up
reviews of restaurants, but did you know it’s also an online travel agency?
If not, you’re far from alone.
Competing against established OTAs like Expedia, Priceline, Orbitz, and Hotels.com, TripAdvisor
may have taken a misstep by focusing on joining the saturated market of electronic reservationists.
In the 3rd quarter of 2016, TripAdvisor saw only a 1% revenue increase from 2015 and a
sizable decrease in net income, earnings per share and free cash flow.
Without the ability to directly make steady money from online booking, the website is
forced to rely on click-based advertising – which, unfortunately, is factored into
that minimal 1% increase.
5.
Avon Though widely accused of being a pyramid scheme,
Avon has been a successful manufacturer and direct retailer of feminine beauty products
and household goods.
What started as a simple door-to-door tactic by David H. McConnell, erupted into a full-fledged
company that expanded well beyond New York City.
Despite years of success, it appears the make-up mogul may be close to the end of the line.
In 2013, the company cut over 1500 jobs worldwide and pulled out of South Korea and Vietnam
while simultaneously reducing its market in the United States.
The Wall Street Journal reported in 2015 that Avon was looking at completely shutting its
U.S. branches after an 18% revenue drop the year prior.
There has also been an 18% reduction in Avon Ladies, the company’s sole source of income.
4.
Sprint Corp.
And they just got the former Verizon guy as their spokesperson!
With heavy competition in the mobile communications industry, it’s not easy remaining on top
as Sprint Corp. has been finding.
In early 2016, the company sought to transform itself and wound up cutting over 2,500 jobs
after closing six customer care centers.
Since 2014, over 6,000 jobs had been cut, and though the company remains optimistic
despite having been ranked fourth among national carriers, an Altman-Z score of -.08 speaks
a troubled future.
According to analysts, one of the biggest dilemmas Sprint may face is the ending of
promotions that attracted many new customers and stricter consumer credit policies, which
would likely hinder signing on questionable and low credit scores.
Several possibilities that may help Sprint achieve a greater free-cash-flow include its
deals with cable companies or a merger with T-Mobile.
3.
Aeropostale In early 2016, the teen apparel retailer sought
protection from Chapter 11 bankruptcy in response to the heavy hit taken by the fashion industry.
Though its rivals, American Eagle Outfitters and Abercrombie & Fitch, were able to adapt
to the economic slump, Aeropostale was forced to close 154 stores spread throughout the
North American market.
The downsize and bankruptcy protection were moves made to stabilize operations, though
disputes with an unnamed vendor, a $160 million loan from Crystal Financial LLC, and the volatility
of the teen fashion market may serve as detrimental roadblocks on the return to positive revenue.
Further assisting Aeropostale are American mall operators, who provided $234 million
in the 3rd quarter of 2016 to keep 230 U.S. stores open.
2.
Sears Holdings Corp.
It seems like it’s been a long time coming, but despite what the company told the public
in July of 2016, Sears Holdings may be living its final days.
After a report by Business Insider claimed that the K-Mart brand would be officially
axed, Sears stepped forward and denied the claims, though it’s difficult to deny the
7.3% drop in sales in 2015 and the lack of any gain since 2010, where it saw a .8% sales
increase.
With hundreds of K-Mart and Sears stores closing, the company may be forced to turn to selling
its most popular assets – Kenmore, Craftsman, and DieHard appliances and tools.
Though there may be a focus on increasing profitability, Sears’ stock figures have
remained consistently in the negative and its Altman-Z score hovers around -1.48, putting
it at risk of closure.
1.
The Container Store Offering overpriced storage solutions when
companies like Ikea, Wal-Mart, and Target provide cheaper and more accessible options
may not have been the best business model for The Container Store.
In less than a year, stock pricing plummeted from over $20 to under $4 per share, and though
it had slowly climbed back up to around $7 per share in late 2016, the company’s long-term
outlook is looking dire.
In the 2nd quarter of 2016, the company saw a marginal increase of .3% of consolidated
net sales and a .9% increase in net sales in its retail stores, while its 3rd party
Elfa International AB sales were met with a 6% decrease.
Will a downward trend continue and will an Altman Z-Score of -1.59 prove accurate for
the fate of The Container Store?