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12 Major Brands That Might Disappear Soon

More well-known brands going under?

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    Gone by 2010? A number of well-known brands disappeared in the last year in large part due to economic forces. Many of them were in the retail industry, led by Circuit City and Aloha Airlines. Who could be next?
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    Borders has struggled for several years as the No. 2 book store behind Barnes & Noble. The pressure from Amazon is overwhelming. Borders extended its $42.5 million senior secured term loan, moving the due date to April 1, 2010. That may be the day that Borders goes away.
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    GAP is a three-brand company. In March, same-store sales for the Gap North America flagship brand were off 14% following a 14% drop in the same month in 2008. Sales at Old Navy were flat for the same month but dropped 27% in March 2008. Old Navy is still the weakest brand of the lot.
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    Avis/Budget operates two car rental businesses. The primary competition for the company is Hertz. Both firms are facing significant problems paying down their debt. The company has said that it plans to operate both brands. Their financial statements indicate that will become increasingly difficult.
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    In late 2007, Crocs' shares traded at more than $72. Now they change hands at well below $2. In the fourth quarter of 2008, Crocs lost $43 million after making $55 million in the same period the year before. Revenue fell from $225 million in the last quarter of 2007 to $126 million.
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    GM, now faced with bankruptcy, will almost certainly close its poorly performing brands. In the first quarter, Saturn sales dropped 59% to 19,843. GM can't afford to support a brand with poor sales that are falling at such a rapid pace.
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    Esquire Magazine is published by Hearst which is having substantial problems in both its newspaper and magazine divisions. Hearst recently threatened to close The San Francisco Chronicle after losing tens of millions of dollars during the last several years.
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    Architectural Digest Magazine has lost 47% of its ad pages this year. The magazine is owned by Conde Nast which is controlled by the Newhouse family. Newhouse is having significant financial problems with both its newspaper operations, which used to be very profitable, and its magazine group.
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    The Chrysler brand faces a problem much like GM faces with its weakest brands. As bankruptcy looms, the automaker knows that it cannot support product design, manufacturing, and marketing for all of its brands. The Chrysler brand has substantially worse sales than Dodge or Jeep.
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    Eddie Bauer stock trades at $.38 now. Just last September it changed hands at more than $8. The company has said that it may violate debt covenants this year. The company's current S&P rating is about as low as it could be -- CCC-. Eddie Bauer could be out of business by mid-year.
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    Palm has been at death's door for some time. Its prospects have improved recently and the company has one last chance to become viable when it launches its new "Pre" product.
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    AIG may be the only large company in America that both the management and federal government want torn apart. If AIG succeeds in selling most of its divisions it will be able to repay more than $100 billion in government loans and investments.
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    The travel industry has been so badly damaged by the economy that the airline industry faces substantial overcapacity. Two of the large US carriers will have to merge to avoid the bankruptcy of another American airline. United Airlines is among the three weakest carriers in the US.