Friday, January 6, 2006

Destined to Disappear: What Businesses Might Not Be Around in Ten Years?

Author: Nick
Category: Money
Topics:

Even at the age of 23, I’ve already seen my fair share of big companies go bankrupt, merge with other companies, or otherwise disappear from the landscape of my life. When I was 14, the F.W. Woolworth store at the local shopping mall closed. I missed it so much. Much of my childhood toy and videogame collection came from its five-and-dimey goodness, and its disappearance marked the beginning of a mass exodus of all the best stores in the mall.

It was an even darker day when Montgomery Ward went belly up. Half my childhood clothes and my Nintendo Entertainment System came from there. And who could forget Monkey Ward’s Electric Avenue??? It was an avenue … of electric stuff! There’s a Wal-Mart in its former location.

Chuck Saletta over at The Motley Fool wrote an article discussing the inevitable mortality of most businesses along with some he predicts won’t be around a decade from today. His two predictions for companies that may soon buy the farm: the behind-the-times Cincinnati Bell and Blockbuster Video. While both companies are struggling to keep up with advancements in their industries, Blockbuster is losing major ground in the DVD rental world to Netflix, and Cincinnati Bell seems to have just discovered the touch-tone telephone.

Around here, Bell Atlantic evaporated into Verizon a while ago, so there’s no equivalent company in my state. Blockbuster, on the other hand, has a store next to every other Starbucks, so I can definitely see a lot of them closing up shop in the next few years (gotta put more Starbucks somewhere, ya know?). I’ve got a few predictions of my own for companies that won’t be joining us in the year 2016. Just remember, these are wild speculations; please don’t go dumping your stock in them or running up to their employees just to laugh and point at them.

Are these companies heading for that great stock ticker in the sky?

  • Krispy Kreme Doughnuts (NYSE: KKD) You know a company is in trouble when its own franchisees start to sue it. Sure, it’s coming out of a major restructuring, and it’s made some smart decisions by closing a bunch of those extra stores from the big “Doughnut Boom” a few years ago. And yes, I’m betting against the company that currently employs my very own wife. But if people’s changing diets and unending lawsuits don’t deflate these doughnuts, then the federal investigations just might.
  • Martha Stewart Living Omnimedia (NYSE: MSO) Who knows; ten years from now, maybe most companies will be founded by, named after, and operated by convicted felons. Prisons will all be equipped with executive conference rooms from which inmates can operate their businesses. Maybe orange jumpsuits will replace shirts and ties as the standard office outfit. While it seems most people have “forgiven” Martha Stewart for her horrible crimes against humanity, Wall Street is still seeing red. But wait, they’ve got a plan to restore the company to its former glory! Apparently Martha Stewart Omnimedia will be riding the scrapbooking wave to financial prosperity. I wish I could make $962,000 a year to come up with ideas like that.
  • Best Buy (NYSE: BBY) Yeah, this one’s a stretch, and it could very well outlive all of us. I mean, Best Buy’s not in any financial trouble or anything, and they’re coming off a strong holiday sales season. So what earned Best Buy a spot on my death watch? Quite simply, they’re about as greedy and evil as a company can get. Some of you may recall Best Buy’s revelation from 2004 that some of its customers are devils who only show up in store for loss leader and rebate-bearing items. Most recently, Best Buy was forced into apologizing for bundling many of its already expensive Xbox 360s with even more expensive extras. Some may call this a smart business tactic, but the day will come when nobody has been untouched by Best Buy’s excessive avarice. So yes, I hereby predict the demise of Best Buy solely based on the fact that it’s operated by meanie poopie heads.
  • Kmart, and probably Sears (NYSE: SHLD), too. What’s that? No fair picking on companies that just emerged from bankruptcy? My apologies, but Kmart’s troubles seem to be far from over. As Wal-Mart’s steamrolling across America continues with no end in sight, Kmart has decided that the key to its future success is to emulate its biggest competitor as closely as possible. Maybe this strategy will buy Kmart a few years, but in a fight between Wal-Mart and Kmart (heck, between Wal-Mart and anything), the odds just don’t look good for the Big K. As for Sears (which exists under the same holding company as Kmart following last year’s acquisition), I just can’t help but get the Montgomery Ward vibe every time I set foot in one of its stores.
  • Yahoo! (NASDAQ: YHOO) I sure hope nothing happens to these guys because then I’ll have a bunch of broken links in this article! And I’m sure Yahoo! won’t just curl up and die as long as the internet is still around. Rather, I think Yahoo! will end the second decade of the 21st century with something like “Time Warner” or “Microsoft” prefixed to its name. It’s a strong company, no doubt, but all the exclamation points in the world won’t help Yahoo! survive alone in the battle with Google. Someone with a few billion dollars to spare will snatch this one up and then the real fight for the internet will begin.
  • kweee.blogspot.com (NYSE: WTF?) Why is such an awesome business on this list? While I could easily stand on my own for a good five hundred years, I predict that Google will buy me out for one BILLION dollars by the end of the year. If not, then maybe Martha Stewart will slip me ten bucks to take her company off this list.

I asked Tegan what company she thinks won’t be around in a decade. She said Wendy’s because it doesn’t have Dave Thomas to do its commercials anymore. Hey, her guess is as good as any of ours!

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