General Discussion

15 Companies Doomed This Year
Walrus at 4:23PM, Feb. 17, 2009
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Source: usnews.com

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It’s possible that none of the firms on this list will liquidate, or even declare Chapter 11. Some may come up with unexpected revenue or creative financing that helps avert bankruptcy, while others could be purchased in whole or in part by creditors or other investors. But one way or another, the following 15 firms will probably look a lot different a year from now than they do today:

Rite Aid. (Ticker symbol: RAD; about 100,000 employees; 1-year stock-price decline: 92%). This drugstore chain tried to boost its performance by acquiring competitors Brooks and Eckerd in 2007. But there have been some nasty side effects, like a huge debt load that makes it the most leveraged drugstore chain in the U.S., according to Zacks Equity Research. That big retail investment came just as megadiscounter Wal-Mart was starting to sell prescription drugs, and consumers were starting to cut bank on spending. Management has twice lowered its outlook for 2009. Prognosis: Mounting losses, with no turnaround in sight.

Claire’s Stores. (Privately owned; about 18,000 employees.) Leon Black’s once-renowned private-equity firm, Apollo Management, paid $3.1 billion for this trendy teen-focused accessory store in 2007, when buyout funds were bulging. But cash flow has been negative for much of the past year and analysts believe Claire’s is close to defaulting on its debt. A horrible retail outlook for 2009 offers no relief, suggesting Claire’s could follow Linens ‘n Things – another Apollo purchase – and declare Chapter 11, possibly shuttering all of its 3,000-plus stores. (Update: See this response from Claire's.)



Chrysler. (Privately owned; about 55,000 employees). It’s never a good sign when management insists the company is not going out of business, which is what CEO Bob Nardelli has been doing lately. Of the three Detroit automakers, Chrysler is the most endangered, with a product portfolio that’s overreliant on gas-guzzling trucks and SUVs and almost totally devoid of compelling small cars. A recent deal with Fiat seems dubious, since the Italian automaker doesn’t have to pony up any money, and Chrysler desperately needs cash. The company is quickly burning through $4 billion in government bailout money, and with car sales down 40 percent from recent peaks, Chrysler may be the weakling that can’t cut it in tough times.

Dollar Thrifty Automotive Group. (DTG; about 7,000 employees; stock down 95%). This car-rental company is a small player compared to Enterprise, Hertz, and Avis Budget. It’s also more reliant on leisure travelers, and therefore more susceptible to a downturn as consumers cut spending. Dollar Thrifty is also closely tied to Chrysler, which supplies 80 percent of its fleet. Moody’s predicts that if Chrysler declares Chapter 11, Dollar Thrifty would suffer deeply as well.

Realogy Corp. (Privately owned; about 13,000 employees). It’s the biggest real-estate brokerage firm in the country, but that’s a bad thing when there are double-digit declines in both sales and prices, as there were in 2008. Realogy, which includes the Coldwell Banker, ERA, and Sotheby’s franchises, also carries a high debt load, dating to its purchase by Apollo Management in 2007 – the very moment when the housing market was starting to invert from a soaring ride into a sickening nosedive. Realogy has been trying to refinance much of its debt, prompting lawsuits. One deal was denied by a judge in December, reducing the firm’s already tight wiggle room.

Station Casinos. (Privately owned, about 14,000 employees). Las Vegas has already been creamed by a biblical real-estate bust, and now it may face the loss of its home-grown gambling joints, too. Station - which runs 15 casinos off the strip that cater to locals - recently failed to make a key interest payment, which is often one of the last steps before a Chapter 11 filing. For once, the house seems likely to lose.



Loehmann’s Capital Corp. (Privately owned; about 1,500 employees). This clothing chain has the right formula for lean times, offering women’s clothing at discount prices. But the consumer pullback is hitting just about every retailer, and Loehmann’s has a lot less cash to ride out a drought than competitors like Nordstrom Rack and TJ Maxx. If Loehmann’s doesn’t get additional financing in 2009 – a dicey proposition, given skyrocketing unemployment and plunging spending – the chain could run out of cash.

Sbarro. (Privately owned; about 5,500 employees). It’s not the pizza that’s the problem. Many of this chain’s 1,100 storefronts are in malls, which is a double whammy: Traffic is down, since consumers have put away their wallets. Sbarro can’t really boost revenue by adding a breakfast or late-night menu, like other chains have done. And competitors like Domino’s and Pizza Hut have less debt and stronger cash flow, which could intensify pressure on Sbarro as key debt payments come due in 2009.

Six Flags. (SIX; about 30,000 employees; stock down 84%). This theme-park operator has been losing money for several years, and selling off properties to try to pay down debt and get back into the black. But the ride may end prematurely. Moody’s expects cash flow to be negative in 2009, and if consumers aren’t spending during the peak summer season, that could imperil the company’s ability to pay debts coming due later this year and in 2010.

Blockbuster. (BBI; about 60,000 employees; stock down 57%). The video-rental chain has burned cash while trying to figure out how to maximize fees without alienating customers. Its operating income has started to improve just as consumers are cutting back, even on movies. Video stores in general are under pressure as they compete with cable and Internet operators offering the same titles. A key test of Blockbuster’s viability will come when two credit lines expire in August. One possible outcome, according to Valueline, is that investors take the company private and then go public again when market conditions are better.

Krispy Kreme. (KKD; about 4,000 employees; stock down 50%). The donuts might be good, but Krispy Kreme overestimated Americans' appetite - and that's saying something. This chain overexpanded during the donut heyday of the 1990s - taking on a lot of debt - and now requires high volumes to meet expenses and interest payments. The company has cut costs and closed underperforming stores, but still hasn't earned an operating profit in three years. And now that consumers are cutting back on everything, such improvements may fail to offset top-line declines, leading Krispy Kreme to seek some kind of relief from lenders over the next year.

Landry’s Restaurants. (LNY; about 17,000 employees; stock down 66%). This restaurant chain, which operates Chart House, Rainforest Café, and other eateries, needs $400 million in new financing to finalize a buyout deal dating to last June. If lenders come through, the company should have enough cash to ride out the recession. But at least two banks have already balked, leading to downgrades of the company's debt and the prospect of a cash-flow crunch.

Sirius Satellite Radio. (SIRI - parent company; about 1,000 employees; stock down 96%). The music rocks, but satellite radio has yet to be profitable, and huge contracts for performers like Howard Stern are looking unsustainable. Sirius is one of two satellite-radio services owned by parent company Sirius XM, which was formed when Sirius and XM merged last year. So far, the merger hasn't generated the savings needed to make the company profitable, and Moody's thinks there's a “high likelihood” that Sirius will fail to repay or refinance its debt in 2009. One outcome could be a takeover, at distressed prices, by other firms active in the satellite business.

Trump Entertainment Resorts Holdings. (TRMP; about 9,500 employees; stock down 94%). The casino company made famous by The Donald has received several extensions on interest payments, while it tries to sell at least one of its Atlantic City properties and pay down a stack of debt. But with casino buyers scarce, competition circling, and gamblers nursing their losses from the recession, Trump Entertainment may face long odds of skirting bankruptcy.

BearingPoint. (BGPT; about 16,000 employees; stock down 21%). This Virginia-based consulting firm, spun out of KPMG in 2001, is struggling to solve its own operating problems. The firm has consistently lost money, revenue has been falling, and management stopped issuing earnings guidance in 2008. Stable government contracts generate about 30 percent of the firm's business, but the firm may sell other divisions to help pay off debt. With a key interest payment due in April, management needs to hustle - or devise its own exit strategy.

This is depressing…
 
last edited on July 14, 2011 4:45PM
Koshou at 4:30PM, Feb. 17, 2009
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Noooooo not Claire's!

Where will I buy tacky plastic jewelry??? D:
last edited on July 14, 2011 1:21PM
seventy2 at 4:37PM, Feb. 17, 2009
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the only one on there, that would ever affect me, is krispy creme.

at work, if you're late, you're supposed to stop by krispy kreme, and bring in donuts for the office. i'd be sad to see it go. plus i prefer it's donuts 2 to 1 of dunkin donuts.
facara
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I'm gonna love you till the money comes, half of it's gonna be mine someday.
last edited on July 14, 2011 3:29PM
Walrus at 4:39PM, Feb. 17, 2009
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Nothing's really going to affect me except Chrysler, and all it's going to do is help increase my dad's sales. Six Flags doesn't bother me considering I've already been there at least six times.
 
last edited on July 14, 2011 4:45PM
lba at 4:50PM, Feb. 17, 2009
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I wouldn't be too ready to count Chrysler out. They've pulled some fast moves in the past when they had issues. But no matter what they're going to be in a tight spot for a long time while they retool their plants to start producing more of their smaller car lines.
last edited on July 14, 2011 1:29PM
usedbooks at 4:51PM, Feb. 17, 2009
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A few years ago, I actually thought Rite Aid was out of business. Every one I knew of vanished long ago or were replaced by CVS. I was surprised when I saw a Rite Aid again.

I honestly don't care about any of these except for the fact that their competitors will have less competition, which is always a bad thing in a capitalist system. If I had stock or something, maybe I'd care, but I don't.
last edited on July 14, 2011 4:37PM
Backstaber at 5:39PM, Feb. 17, 2009
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I can see Rite Aid going out, I go there and stuff is always stocked. (people never buy stuff from there, they go to WaWa instead)

I hope Six Flags does survive though, cause I kinda work there. XD
last edited on July 14, 2011 11:15AM
kyupol at 6:17PM, Feb. 17, 2009
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If you read “15”, multiply that by at least 10 to get more or less at the real picture.

Its so fucking stupid.

Right at this year when I felt the need to move on to a higher paying job… I got a few interviews in where I KNOW I IMPRESSED THE INTERVIEWER… but damn. Fucking economy. No wonder nobody's hiring now.

So yeah. Most likely I'll be keeping my current job.

Maybe I shouldnt be bitching about my pay cuz at least I have a job. lol!

/end rant.
NOW UPDATING!!!
last edited on July 14, 2011 1:26PM
seventy2 at 7:51PM, Feb. 17, 2009
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lba
I wouldn't be too ready to count Chrysler out. They've pulled some fast moves in the past when they had issues. But no matter what they're going to be in a tight spot for a long time while they retool their plants to start producing more of their smaller car lines.

i say they just do it….just fall right into the big bankruptcy…lose their contracts with the big unions. no offense to any current union workers, but unions are screwing the pooch here. i had a cousin that worked at Daimlerchrysler. (i dont know if he still does, we kind of parted ways when i told him what i thought of the current state of unions) any ways, he was a union worker. his job in the factory was to sit next to an automated screwdriver of sorts. he said that he sat there, and the machine would beep, meaning it couldnt tighten, or find the thing that needed to be tightend on the auto. he would check it out, tighten it if it was there, fill a report if it wasnt….he said he only did this 3-4 times in a 12 hour shift. and on a bad day he was paid 20 an hour.
there's a lot of union stories like that, i think a bankruptcy, with canceled contracts will do everyone a favor.
facara
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I'm gonna love you till the money comes, half of it's gonna be mine someday.
last edited on July 14, 2011 3:29PM
lba at 8:00PM, Feb. 17, 2009
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seventy2
i say they just do it….just fall right into the big bankruptcy…lose their contracts with the big unions. no offense to any current union workers, but unions are screwing the pooch here. i had a cousin that worked at Daimlerchrysler. (i dont know if he still does, we kind of parted ways when i told him what i thought of the current state of unions) any ways, he was a union worker. his job in the factory was to sit next to an automated screwdriver of sorts. he said that he sat there, and the machine would beep, meaning it couldnt tighten, or find the thing that needed to be tightend on the auto. he would check it out, tighten it if it was there, fill a report if it wasnt….he said he only did this 3-4 times in a 12 hour shift. and on a bad day he was paid 20 an hour.
there's a lot of union stories like that, i think a bankruptcy, with canceled contracts will do everyone a favor.

That I can agree with. The car companies are getting royally screwed by the unions. There's program for auto workers that if they can't get a job as an auto worker or they're laid off, then they can make the car companies end up paying for them to do things like clean up freeways. It's kind of hard to compete with the Japanese companies, who are so good at getting around the unions, with policies like that foisted on them. The unions used to be there to protect the workers from corrupt business practices, but it's kind of gone the opposite way in recent years.
last edited on July 14, 2011 1:29PM
ozoneocean at 8:51PM, Feb. 17, 2009
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usedbooks
I honestly don't care about any of these except for the fact that their competitors will have less competition, which is always a bad thing in a capitalist system. If I had stock or something, maybe I'd care, but I don't.
Not actually true. The purpose of a capitalist system is just to make money really. Less competition will be good for those companies. :)
It's only bad for the consumer.
lba
The unions used to be there to protect the workers from corrupt business practices, but it's kind of gone the opposite way in recent years.
And yet in non-unionised work places the workers ARE screwed by corrupt practises. And that's rife in the U.S.

For example: there is no way in hell any bussiness here in Australia would be allowed to include “tips” and gratuities as part of someone's expected wage as a way of paying them less than they can afford to live on. Such things are imorral…
But that's common practise in the service industry in a lot of the world, especially over there.

There has to be a happy medium :)

—————–
Besides, it isn't the union's fault those comapnies are doing it tough, no matter how bad they are. Chrysler is just a weak company that has never really caught up with the modern era. They've been going down for decades.- As for the Daimler deal, that's a case in point! The German workforce has way more benifits and better conditions than the American one and yet it was Daimler that droped Chrysler…
 
last edited on July 14, 2011 2:33PM
usedbooks at 9:40PM, Feb. 17, 2009
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usedbooks
I honestly don't care about any of these except for the fact that their competitors will have less competition, which is always a bad thing in a capitalist system. If I had stock or something, maybe I'd care, but I don't.
Not actually true. The purpose of a capitalist system is just to make money really. Less competition will be good for those companies. :)
It's only bad for the consumer.
Well, since none of my friends own giant corporations, I'm gonna go ahead and call it a bad thing. I'm ego-centric like that. ;)
last edited on July 14, 2011 4:37PM
lastcall at 4:19AM, Feb. 18, 2009
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NOOOoooo NOT KRISPY KREME! /cry
last edited on July 14, 2011 1:28PM
imshard at 8:21AM, Feb. 18, 2009
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As noted right at the top, we're not likely to see these companies go away altogether. Massive layoffs and location closings I can see but this isn't a list of foreclosures.
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last edited on July 14, 2011 12:58PM
PIT_FACE at 9:37AM, Feb. 18, 2009
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YOU MOTHER FUCKERS NOT SIX FLAGS!!!!THAT'S NOT FUCKING FAIR!!!!!

after shit gets better though, even if it DOES take a million and half years, we'll see some of this stuff again. like serius for example, i dont see that going away for good unless something much better comes around while it's down. just hopefully whatever DOES come around doesnt ass rape us…which now that i think about it….probably will….still got internet radio though…for now…..:gem:
last edited on July 14, 2011 2:44PM
Niccea at 9:39AM, Feb. 18, 2009
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-.- And my dad just bought my brother a season pass…
last edited on July 14, 2011 2:12PM
Walrus at 1:10PM, Feb. 18, 2009
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Sorry, but face the facts, everything's not going to stay in business forever.
 
last edited on July 14, 2011 4:45PM
PIT_FACE at 1:14PM, Feb. 18, 2009
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Walrus
Sorry, but face the facts, everything's not going to stay in business forever.

yeah, but these are big corperate places, and to see so many of them falling at once alarms people.
last edited on July 14, 2011 2:44PM
Skullbie at 1:29PM, Feb. 18, 2009
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Besides krispy creme,which was doing bad before the recession, nothing on that list is of value to me.

Rite aid; we have CVS allover which is quite frankly, superior.

claire; it's a mall based store, it'll probably make a comeback.

DTG; i don't rent cars, but i can see this being a problem if it goes

Realogy; real estate, really they should know they're doomed and branch out to other things.

Casinos; thank god, casino+struggling americans=not good.

Sbarro; their pizza is not that good.

blockbuster; overpriced. i use netflix and hollywood videos.

landy's; we have enough struggling food chains as is.

Sirius; the idea is great but it's overpriced when regular radio suits you fine.

trump; see casino


 
last edited on July 14, 2011 3:47PM
MetalLuigi at 4:50PM, Feb. 18, 2009
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Skullbie
blockbuster; overpriced. i use netflix and hollywood videos.

I can see blockbuster going the way of netflix and becoming an online only service if things get really bad. Don't they already do something like it, though? I haven't paid attention to them since I bought a used Resident Evil 4 at one of their stores.
My two comics: Bob the Alien and Tom the Turkey
last edited on July 14, 2011 1:59PM
cool guy at 6:53PM, Feb. 19, 2009
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I read this on Yahoo News and when I saw Krispy Kream I nearly died.
This life we live shall soon be past,only what's done for Christ shall last! ! ! ! ! ! ! ! !
last edited on July 14, 2011 11:45AM
seventy2 at 7:12PM, Feb. 19, 2009
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Skullbie
blockbuster; overpriced. i use netflix and hollywood videos.

I can see blockbuster going the way of netflix and becoming an online only service if things get really bad. Don't they already do something like it, though? I haven't paid attention to them since I bought a used Resident Evil 4 at one of their stores.

they do, it's just no where near as popular
:
1. they have a blockbuster in almost every city
2. net flix just has better deals online. i believe blockbuster you have to pay more.
3. ……..
facara
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I'm gonna love you till the money comes, half of it's gonna be mine someday.
last edited on July 14, 2011 3:29PM
ozoneocean at 7:26PM, Feb. 19, 2009
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All these guys could bouce back. Or even keep on strugling along regardless…
 
last edited on July 14, 2011 2:33PM
vexx78 at 8:54PM, March 5, 2009
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This is so sad but I hope that we all, the global economy not just America's, will bounce back and learn a hard lesson on greed and corruption. Hopefully we'll come out as a better world because of this. I hope…
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last edited on July 14, 2011 4:40PM
bravo1102 at 3:03AM, March 6, 2009
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Only one I'll really miss will be Dollar thrifty Rent-a-car. They always had the best deals and offers whenever my wife and I have traveled.

There are still Rite Aids in NJ, just that no one ever goes there.

Krispy Kreme came and went in NJ. Dunkin Donuts has better coffee and breakfast foods that aren't just globs of dough, grease and sugar. (not that a glob of dough, grease and sugar isn't a good thing. Kept me showing up to work everyday when the platoon leaders brought the donuts ;)

And the rumors of the demise of Chrysler are exaggerated. Come on now they're saying GM will declare bankruptcy! If GM isn't safe nothing is. (Chrysler should never have sold their military subsideries to General Dynamics)
last edited on July 14, 2011 11:33AM
the2ndredbaron at 11:15PM, March 6, 2009
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MetalLuigi
Skullbie
blockbuster; overpriced. i use netflix and hollywood videos.

I can see blockbuster going the way of netflix and becoming an online only service if things get really bad. Don't they already do something like it, though? I haven't paid attention to them since I bought a used Resident Evil 4 at one of their stores.

I work at Blockbuster. And I can tell you that we are not hurting as bad as that report makes it out to be. And for what the store provides we are not “overpriced”, well the video games are at any rate. And the online deals are different and mostly comes down to what you want.

Anyway I work in the company and like the company and just wanted to point out that we are not that bad off.
 
last edited on July 14, 2011 4:16PM
MetalLuigi at 11:52PM, March 6, 2009
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the2ndredbaron
I work at Blockbuster. And I can tell you that we are not hurting as bad as that report makes it out to be. And for what the store provides we are not “overpriced”, well the video games are at any rate. And the online deals are different and mostly comes down to what you want.

Anyway I work in the company and like the company and just wanted to point out that we are not that bad off.

That's good to hear. You all do have some awesome used games at reasonable prices, so I check back every so often to see what's in stock.
My two comics: Bob the Alien and Tom the Turkey
last edited on July 14, 2011 1:59PM
lothar at 11:11AM, March 7, 2009
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who needs em , they all suck , krispy cream is overrated

they can join the likes of other doomed companies such as

Oliver and company
Bad company
threes company too

etcetera
last edited on July 14, 2011 1:45PM
seventy2 at 4:38PM, March 7, 2009
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let us have a moment of silence, for krispy kreme has shut down locally, and never again, when someone is late, will i taste their glazedness.

post script

i blame this thread.
facara
Running Anew an exercise blog.
I'm gonna love you till the money comes, half of it's gonna be mine someday.
last edited on July 14, 2011 3:29PM
Kristen Gudsnuk at 12:07PM, March 8, 2009
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I'm so glad I went to an overpriced school and am coming out into this balmy economy with an English major and piles of student loans. Hooray!

Oh a serious note, here's to hoping that shitty fast food places go out of business– or better yet– are outlawed.
last edited on July 14, 2011 1:22PM

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