Like McDonald’s, Walmart (NYSE: WMT) bore the brunt of the labor protests around raising the minimum wage last year. The company employs more workers who make less than $10 per hour than any company in America, according to an analysis by 24/7 Wall St in collaboration with NELP. While the company reports that its U.S. workers make an average of $12.81 an hour, this does not include part-time hourly wages. According to Glassdoor, Walmart sales associates, who are often part-time hourly employees, earn less than $9.00 an hour, on average. Further, only half of the store’s employees approve of the CEO.
Customers were less satisfied with service at Walmart in 2012 than at any competing chain. Possibly as part of an effort to stem employee dissatisfaction and deflect negative media attention, the world’s largest retailer promoted 35,000 part-time workers to full-time status.
Comparable sales at Walmart’s U.S. stores declined 0.3% in the third quarter. Also, company shares have underperformed the S&P 500 during the past year.
7. JPMorgan Chase
JPMorgan Chase (NYSE: JPM) has been embroiled in several major scandals in recent years. In 2012, the company captured headlines with the so-called “London Whale” fiasco, in which a series of trades cost it billions of dollars. As a result, the company’s management and its risk controls were criticized.
Yet, as 2013 wore on, the scandals continued piling up. In October, the company agreed to pay a $13 billion settlement related to its actions — and those of acquisitions Bear Stearns and Washington Mutual — in off-loading poor quality mortgage-backed securities onto investors.
JPMorgan also became the focus of a scandal in China and Hong Kong, where it reportedly hired the children of Chinese elites to help facilitate the bank’s business in China. The new year has also started off poorly for the bank, which was fined for ignoring signs that Bernie Madoff was running a ponzi scheme. The mounting negative press has led many to call for CEO Jamie Dimon’s resignation.
lululemon was once one of the world’s most-promising retail companies. However, it has fallen on hard times. Shares are down nearly 20% in the past 12 months, compared with the S&P 500’s 25% increase.
lululemon was once the only game in town for yoga wear, clothing that has become extremely popular in the last few years. But larger clothing brands have begun eating away at the company’s market share. Shares are down more than 15% since the company cut its outlook for the fourth quarter and fiscal year in mid-December.
The company was embroiled in several public relations fiascos last year. After customers began complaining that one style of the company’s pants were see-through in certain conditions, lululemon issued a recall. The problems might have ended there had the company’s Chairman Chip Wilson not mentioned on television that the pants might not work on women of all sizes. In the ensuing fallout, Wilson resigned.
The long and tragic decline of BlackBerry is a good example of how quickly a market leader can go astray. The grandfather of the smartphone industry has lost almost all of its market share to current leaders Apple and Samsung. As recently as 2008 the company was one of the largest sellers of smartphones in the world, with total unit sales more than double those of Apple. Since then, however, the company’s share of the mobile phone market has evaporated.
BlackBerry shares dropped by nearly 30% over the past year, while the S&P 500 gained more than 25%. Revenue in the third quarter was approximately $1.2 billion, down 56% from the year before. The company recorded revenue from 1.9 million smartphones in the period, compared to 6.9 million in the same quarter of the previous year, and the company lost $4.4 billion in the quarter. In contrast, Apple sold 33.8 million iPhones in its last reported quarter.
BlackBerry launched two new phones last year in a last-ditch effort to field a competitive product. Unfortunately, consumers ignored the Z10 and Q10, prompting the company to announce it was cutting one-third of its staff and taking an inventory write-down of roughly $960 million in its fiscal second quarter.
JCPenney has probably made more operational and strategic mistakes than any other large publicly traded company in America. Penney hired Apple’s retail chief Ron Johnson in November 2011 to replace longtime CEO Mike Ullman. Johnson implemented a series of marketing and merchandising strategies that not only failed to boost revenue but actually hurt sales — same-store sales and revenue fell roughly 25% in fiscal 2012. Same store sales failed to meet modest expectations in 2013.
The company then rehired Ullman as CEO in April 2013, despite his poor performance before Johnson joined. Since returning, Ullman has announced plans to reverse most of Johnson’s changes. Because of its sales failures and poor balance sheet, Penney is considered by many to be teetering on the brink of bankruptcy. The stock market has ravaged the stock, pushing down shares by 60% over the last five years.
JC Penney has also done poorly in the critical e-commerce sector. In the Foresee study of online retail customer satisfaction, Penney scored well down the list, a sign that it has an uphill battle to get consumers back.
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