10 Massive Companies That Crashed in 2010
It was a tough year for some major companies. Many of the largest closed their doors in 2010, some after being in business for more than 150 years. Media outlets, car manufacturers, and grocery chains all felt the sting of bankruptcy or worse.
Below is a list of 10 large and established brands that folded in 2010. Most suffered from not being able to keep up with the changes in technology, and others simply grew too fast for the current economic climate.
Whatever the reasons behind each company's sad story, there is plenty we can learn from their demise to ensure that we don't make the same mistakes with our own businesses. Remember: Each of the companies below started out as a small business.
In the last few years the video rental industry has changed drastically. Netflix abolished the notorious late fee, instead relying on the trusty subscription model. RedBox now serves video rentals in convenient kiosks for only a $1. Caught in the middle is Blockbuster. It seems renting a video at a brick-and-mortar establishment may be a thing of the past, and traditional rental companies like Blockbuster are having a hard time finding their place in the digital world.
Blockbuster filed for bankruptcy in September of 2010, 25 years after the movie rental chain was started in Dallas, Texas.
Changing with the times is (and always has been) critical for sustainable success, and Blockbuster is an excellent example of not adjusting.
Canwest was one of the largest media outlets in the world, covering assets in radio, television, and other media throughout Canada and other countries. In fact, the vast size and growth of Canwest may have been the leading factor in the company filing for bankruptcy in 2010. Canwest was notorious for gobbling up Canadian media outlets and was soon using the bulk of its income to pay off high-interest debt for their acquisitions. The company never recovered after the financial meltdown of 2008.
Fast-paced growth can kill a company just as easily as stagnant growth.
Newsweek is one of the most popular magazines in U.S. history. Started in 1933, Newsweek has become the second-largest magazine in the U.S., with a circulation of around 2 million subscribers.
Newsweek shifted focus in 2008 with hopes of attracting a different audience and improving the financial outlook of the company. Unfortunately, the combination of a bad global economy and different business directions caused the company to lose 38% of their revenue from 2007 to 2009.
Sometimes change can do more damage than good in tough times.
It's an age when conservative, economical cars with high miles-per-gallon rule the roads. But Pontiac, at the height of its day, was exactly the opposite. The car manufacturer was once known for its muscle cars like the GTO and Trans-Am, and it was the first high-performance division of General Motors.
Pontiac was shut down in 2010 after a massive restructuring at General Motors. The brand never fully recovered from the increased fuel costs, higher insurance prices, and federal emissions from the 1970s on.
The Great Atlantic and Pacific Tea Company (A&P) is one of the oldest companies on the list, started in 1859. The supermarket chain has 395 stores along the East Coast. In 2009, A&P was the 34th largest retailer in the U.S.
The company has faltered during the recession, and rising real estate prices and more competition have left the chain in rapid decline. A&P added a chunk of debt when it acquired Pathmark in 2007 as well, which added to the increasing overhead of the chain. A&P declared bankruptcy in December.
Car manufacturers are having a tough time in the current economic state. The Mercury division was shut down as part of Ford's restructuring. Ford's focus on fewer models has helped the company become more profitable, and unfortunately the Mercury brand had to be sacrificed. By 2010, Mercury only made up about 1% of the entire automobile market in North America.
7. Hollwood Video
Hollywood Video joined Blockbuster as the other video and game rental chain that declared bankruptcy in 2010. Like Blockbuster, Hollywood failed to keep up with the changing market of video rentals, relying on the older models of distribution and mostly discounting the Internet as a platform to distribute movies.
Saturn was started in 1985 as a direct response to the growing popularity of foreign cars in the U.S. During its heyday Saturn competed with Japanese car manufacturers like Toyota and became popular for its "no haggle" pricing. Yet Saturn could never really convert car buyers, as 41% of Saturn owners were previous General Motors owners.
Saturn eventually met the same demise as its sister company, Pontiac, and was shut down after the massive restructuring of General Motors.
9. Uno Chicago Grill
The original Uno Chicago Grill claims to have started the deep dish pizza in Chicago in 1943. The company has since grown to 216 restaurants and various other enterprises.
Uno Chicago Grill filed for Chapter 11 bankruptcy in January of 2010.
General Motors' Hummer was a hot commodity for the first half of the 2000s. The Hummer was based off of the rugged, all-terrain, military-issued Humvee that was made popular for its role in the Gulf War. In fact, the Hummer was partially pushed to be manufactured as a civilian vehicle by Arnold Schwarzenegger, who had seen a convoy while filming a movie.
As oil prices rose and the economy fell in the late 2000s, demand for large SUVs like the Hummer waned. On April 7, 2010, General Motors officially shut down the Hummer line.