Ten Brands That Will Disappear in 2014

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1. J.C. Penney

J.C. Penney Co. Inc. (NYSE: JCP) has been in trouble for some time. Those who still believe in its future as an independent retailer point to the company’s ability to get a loan of $2.25 billion from Goldman Sachs and other investors, secured primarily by real estate and leases. That money, optimists claim, will last until CEO Myron Ullman can turn the company around. Ullman recently has returned to the company’s top job.

On the other hand, many believe the company cannot come back from the unprecedented sales losses it has suffered in recent years. The industry is very competitive, both at brick-and-mortar stores and online. Big-box retailers from Walmart to Target and successful department stores such as Macy’s are larger than J.C. Penney and are growing. At the e-commerce level, companies such as Amazon.com and eBay, are gobbling up market share. Amazon has done damage to retailers much healthier than J.C. Penney.

Even in a less competitive environment, a J.C. Penney comeback could not be sustained. For the year ended February 3, the company reported that comparable store sales dropped 25.2%, revenue fell 24.8 % to $12.985 billion and Internet sales were $1.02 billion, a plunge of 33% from the previous year. While the most recent quarter was considered an improvement with sales down 16.4%, in reality it was nothing more than a brief reprieve. There is absolutely no reason to believe that J.C. Penney’s prospects will improve.

2. Nook

Barnes & Noble Inc.’s (NYSE: BKS) e-reader was destined to struggle from the start. It was launched in October 2009, roughly two years after Amazon.com’s Kindle, which was, and has remained, the market leader. Both products were hit by competition from Apple’s iPad before the e-reader business even hit its stride. Adoption of tablets is forecast to grow 69.8% in 2013, while e-readers are expected to drop 27%.

The Nook was thrown a lifeline a year ago, when Microsoft invested $300 million in Barnes & Noble’s digital business, but to no avail. It has been downhill since. Sales at the company’s Nook segment, which includes both the e-reader and online books, declined by 26% between the third quarter of 2012 and the third quarter of 2013. The Nook’s disadvantage may have little to do with its hardware or software and more to do with size of its online audience. It competes against much larger e-commerce sites that have access to hundreds of millions of new readers. While Amazon has more than 130 million visitors a month according to Quantcast, Barnes & Noble has just over 6 million visitors.

Also Read: The Most Popular American Brands in China

3. Martha Stewart Living Magazine

Martha Stewart Living Omnimedia Inc. (NYSE: MSO) has three divisions: publishing, broadcasting and merchandising. In the five years up to the end of 2012, publishing revenue fell from $179.1 million to $122.5 million. Last year, the division lost $62 million. In the first quarter of this year, publishing revenue dropped from $30.8 million to $24.5 million. The unit lost $990,000 in that period. Because of its troubles, the company tried to sell off smaller magazines. Its Everyday Food stopped publication as a standalone title with the December 2012 issue. Whole Living was discontinued after the January/February 2013 issue.

The main problem at the company’s flagship magazine, Martha Stewart Living, is the precipitous drop in advertising pages. According to the Media Industry Newsletter, the magazine’s advertising pages fell from 1,306 in 2008 to 766 last year. Pages are up to 404 through the first half of the year, but even if the full year runs at this rate, it is not enough. The company does have a good opportunity to retrench.

Two of Omnimedia divisions are doing quite well and could sustain a restructured company. Merchandising had revenue of $11.5 million in the first quarter, and an operating income of $5.7 million. Even the small broadcasting operation made money. The company could move the magazine online, as many other newspapers and magazines have done, to avoid the huge costs of paper, printing, and adding new subscribers. Martha Stewart Living lost its ability to be a standalone magazine long ago.