10 Brands That Will Disappear in 2015

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7. Shutterfly

Shutterfly is a Web 1.0 business in a social media world. While it continues to dominate the online photo printing industry, the emergence of free sharing and online storage sites such as Instagram, Facebook and Dropbox has compromised the company’s future ability to attract customers. Many of these services are optimized or native to mobile, where Shutterfly falls short.

Shutterfly had a modest 2.55 million customers in the first quarter of 2014, compared to 2.25 million the same quarter last year. Even though revenue rose 22% year over year to more than $783 million, it remains a small business. While Facebook does not generate revenue directly from this service, its users uploaded 350 million photos a day last year.

Shutterfly shares fell 18% over the past 12 months, against an almost 20% gain in the S&P 500. But with shares down it has become an attractive acquisition target in the online sharing or storage business with limited exposure to paying customers for printed photos, cards or calendars. The deal frenzy in the tech space has public companies such as Amazon and Apple, which have huge cash hordes, looking for new complementary businesses. The company has retained an investment bank to look for a buyer.

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8. Time Warner Cable

Time Warner Cable accepted an offer from Comcast for $45.2 billion at the beginning of this year. The acquisition would create the largest cable company in the United States with a combined total of 30 million subscribers. The deal is valuable because there is very little market overlap. Many, however, oppose it, including wireless carriers, online video providers like Netflix, and consumer advocacy groups that believe the combination will create a monopoly and result in higher rates.

The single biggest hurdle to the deal is federal government approval. The Justice Department and Federal Trade Commission will lead the government’s assessment of the deal. Some members of Congress have also expressed doubts about whether the transaction would be fair to consumers. In 2011, the Justice Department blocked a similar deal involving AT&T’s buyout of T-Mobile because of antitrust concerns.

The deal would be one in a series of anticipated mega-mergers that would leave wired and wireless broadband in fewer hands. The market has speculated for some time that Sprint will buy out T-Mobile to better compete with industry leaders AT&T and Verizon. Most experts believe Time Warner Cable will be gone by the end of 2014.

9. BlackBerry

BlackBerry is about to run out of its nine lives. As recently as 2008, BlackBerry, then operating as Research In Motion, had 19.5% of the global smartphone market. However, following Apple’s introduction of the iPhone in 2007 and Google’s release of the Android mobile operating system in 2008, that figure fell to less than 1% by late 2013.

Despite the fanfare surrounding the release of two new phones last year, sales of the Z10 and Q10 were abysmal. At the end of last year, BlackBerry outsourced its hardware to Foxconn to focus on its software offerings.

The company has positioned its QNX platform as the most secure operating system for mobile communication, and it is now a leading OS in the auto and health care industries. While these are attractive businesses for potential buyers, they are inadequate on their own to make the company viable.

Revenue has continued its multiyear slide, confirming the belief that BlackBerry cannot survive on its own. In the most recently reported quarter, revenue dropped to $966 million from $3.1 billion in the same quarter the year before.

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10. Aeropostale

Aeropostale competes with Abercrombie & Fitch and American Eagle Outfitters. Like those competitors, Aeropostale makes and markets inexpensive, casual clothes for teenagers, which it sells through company stores. The entire category is in trouble because teens are choosing inexpensive fashion-forward retailers like Forever 21 and H&M over branded apparel.

Out of the three largest teen-retailers, Aeropostale is in the most trouble. In the most recently reported quarter, revenue fell 12% to $396 million from the same period last year. Same-store sales were off 13%. The retailer’s loss also widened to $77 million from $12 million in the same period a year earlier. The company’s stock price plunged by more than 85% in the past five years.

The company ended its first quarter with only $24.5 million in cash, its lowest since 2000, according to Cowen and Co. analyst John Kernan. Following the first quarter’s results, the company announced that it had secured $150 million in financing from private equity firm Sycamore Partners, which is expected to keep it afloat at least until the end of the year.

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