Special Report

10 Brands That Will Disappear in 2017

Source: Wikimedia Commons

4. Pebble

Pebble is the story of a Silicon Valley startup that beat Apple, Google, and other competitors in creating a smartwatch, only to eventually lose the market entirely. In April 2012, Pebble launched a Kickstarter campaign that raised more than $10 million in just a month, the most funded such campaign at the time. Pebble’s first watch, the first of its kind to run on iOS or Android platforms, was launched in 2012, far ahead of major competitors. When Apple eventually released the Apple Watch in April 2016, it appeared that the increased interest in smartwatches might drive up demand for Pebble, which were a cheaper alternative. Sales initially spiked but eventually plummeted. In March, in the midst of tanking sales, the company laid off one-quarter of its existing staff. Pebble’s fate was sealed this year after it was acquired in December by competitor Fitbit for $40 million. The company is no longer manufacturing or selling its devices, but Pebble devices can still be purchased through third-party vendors. That will likely become much harder through 2017.

Source: Wikimedia Commons

5. Theranos

Consumer health care technology company Theranos raised more than $400 million in funding and had a valuation of $9 billion in 2014. The company was poised to revolutionize the health care industry, and its founder Elizabeth Holmes was hailed as the next Steve Jobs. The company’s flagship product, the Edison device, could draw and test blood in a single finger prick. In a series of investigative reports by The Wall Street Journal assessing the accuracy of the blood tests, however, the Edison devices were found to be faulty. Theranos voided the tens of thousands of blood tests administered in 2014 and 2015, and Holmes’s net worth fell from $4.5 billion — her 50% stake in the company — to nothing.

Theranos has been hit with multiple lawsuits in the wake of the WSJ revelations. In November, Walgreens sued the company for $140 million on the grounds that Theranos misrepresented the efficacy of its technology. Walgreens was Theranos’s biggest partner before the scandal, offering blood testing services at 40 now-closed Theranos Wellness Centers in Walgreens locations throughout Arizona. Multiple solo investors, many of whom invested more than $100 million in the company, have also sued Theranos. In addition, patients who suffered heart attacks or other medical issues after receiving normal blood test results from Theranos have also filed multiple lawsuits against the company. The company’s future is bleak in the face of so many lawsuits. Additionally, Holmes is barred from owning or operating a medical laboratory for two years.

Newport Centre Mall-Grand Opening Event August 8, 2013

6. The Limited

The Limited is the latest casualty of changing customer behavior and declining mall sales. The Limited was originally a spinoff from L Brands, a company whose flagship brands include Victoria’s Secret and Bath & Body Works, and is today owned by Sun Capital Partners. The company’s recent activities point to imminent bankruptcy, and Bloomberg has reported that sources close to the company have confirmed as much. The Limited recently hired multiple legal advisers for help with debt restructuring. The law firms were also hired to help with possible asset liquidation, indicating that The Limited is likely to sell its stores and merchandise in a going-out-of-business sale. An additional sign of impending bankruptcy, all sales at the company’s online store are final and 50% off.

Many of The Limited’s mall neighbors, including Aeropostale and PacSun, met similar fates this past year. Each of these mall-based retailers declared bankruptcy after failing to adapt to a changing retail environment. In the case of The Limited, consumer tastes among women are changing in favor of high-end products over mid-priced apparel. After more than 50 years in business, The Limited will likely close its doors in 2017.

Source: Wikimedia Commons

7. AT&T U-Verse

AT&T U-verse is the brand of fiber-based triple-play telecommunications offerings from AT&T that includes broadband internet, telephone, and video services. After last year’s acquisition of DirecTV, the largest satellite TV provider nationwide, AT&T has been phasing out its U-verse subscriptions and pushing customers towards DirecTV. The shift is part of a cost savings effort by AT&T and an attempt to capitalize on the DirecTV brand. Satellite TV has lower hardware and programing costs than fiber-based TV, so the more customers AT&T switches from U-verse to DirecTV, the more money the company will save. According to CFO John Stephens, content is roughly $17 more expensive to provide for U-verse customers than for DirecTV customers. To redirect customers, AT&T has stopped building U-verse set-top boxes, and is coaxing prospective customers towards satellite options.

The company’s efforts to switch customers are reflected in its recent financial reports. In the second quarter of 2016, AT&T gained 342,000 new satellite TV subscribers and lost 391,000 U-verse TV subscribers. The transition is part of a larger effort by AT&T to combine its services into a single entertainment hub, with internet, satellite TV, and wireless in one home device.

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