Special Report

10 Brands That Will Disappear in 2016

4. Pacific Sunwear of California

Also known as PacSun, retailer Pacific Sunwear of California reported fiscal 2015 revenue of $826.8 million, up from $797.8 million in 2014 and from $784.7 million in 2013. Growing income, however, has been a struggle. In the second quarter of this year, the company posted a considerable loss when non-cash gains were excluded.

PacSun’s store count declined from 873 in January 2011 to 609 as of September 2015 in all 50 states and Puerto Rico. Even as the company’s store count continues to decline, one of the most difficult problems Pacific Sunware faces remains its ratio of store locations to total revenue. Gap’s yield per location is several times that of Pacific Sunwear. Looking ahead to the current quarter, the company expects same-store sales to drop between 3% and 6%, which would put further strain on the company’s financials.

The retailer’s stock has collapsed by nearly 90% over the six months since April. Its shares have been in the penny stock range for long enough that NASDAQ has sent the company a delisting notice. At $0.28 a share, Pacific Sunwear’s financial condition has most of the hallmarks of an approaching bankruptcy.

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5. A&P

Dating back to the 1860s, The Great Atlantic & Pacific Tea Company, now known as A&P, first filed for Chapter 11 bankruptcy protection at the end of 2010. It again filed for bankruptcy in July of this year, but this time on its way to full liquidation — a century and a half after it was founded.

The company’s troubles began decades ago as it failed to keep pace with changing trends in the grocery store industry. By 2000, new competitors, especially Walmart, further hurt the legendary chain, forcing it to further reduce its store count — from a peak of 16,000 — to just 600 locations. By the time the Great Recession rolled in, A&P was ill equipped to survive it.

The company laid off thousands of workers five years ago and closed numerous stores across the nation as a result of the most recent filing. AB Acquisition, also known as Albertsons Companies and one of the largest grocery chains in the nation, purchased the bulk of A&P’s stores and reopened them under the ACME Markets brand.

6. Volkswagen’s TDI Brand

Turbocharged direct injection, or TDI, is a brand of Volkswagen engine that is available for nearly every model in VW’s lineup, including Jetta, Beetle, and Golf models. Following the recent emission standard debacle, though, the TDI brand has been virtually destroyed. Conservative estimates put the cost of the recalls and related expenses into the billions of dollars. Already, the company reported its first quarterly loss in 15 years and issued a full year profit warning.

For years, clean diesel was presented as an alternative to hybrid engines and was promoted as a major reason for consumers to buy cars with TDI engines. Now, the perceived advantage of TDI engines has become a huge liability. The Environmental Protection Agency accused VW in September of deliberately designing its vehicles to circumvent emissions tests. A software turned on the car’s’ full emissions control systems only during emissions tests. The rest of the time, the software disengaged the system to allow for better performance and fuel efficiency. The German automaker will likely be required to recall hundreds of thousands of its cars.

VW surpassed Toyota last year as the world’s largest automaker. While the company likely will not hold onto this title for very long, it is also very unlikely it will go under as a result of the scandal. The TDI brand, however, and perhaps eco-friendly diesel brands more generally, will most likely disappear.

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7. US Airways

Founded in 1979, US Airways will shortly be gone altogether. The company’s merger with American Airlines was completed in 2013. The combined company will rebrand all of its planes with the AA logo. While the US Airways logo may still appear on some airport buildings and planes in the next few years, it will phase out entirely by the fourth quarter of 2017.

In an industry marked by bankruptcies and mergers, brands often disappear. In a merger, however, it is not always clear which brand will remain. Prior to the 2013 merger, American Airlines was actually worse off financially than US Airways. Yet, while the more stable US Airways purchased the failing American Airlines, the members of the board selected the brand they perceived to be more well known. This could be because US Airways had a smaller footprint than American Airlines.

After two consecutive years of negative balance sheets — American Airlines reported net losses of $1.9 million and $1.8 million in its 2012 and 2013 fiscal years respectively — the new company reported net income of $2.9 billion last year.

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