Wednesday, April 22, 2009

Twilight of Some Brands

Yesterday Raquelle of Out of the Past posted a link on Twitter to an article on 24/7 Wall Street entitled "Twelve Major Brands That Will Disappear." The article makes for interesting, if frightening reading. 24/7 Wall St. examined 100 different major brands facing difficulties. They examined the records of those companies that are public or divisions that are owned by public companies. They looked at information on sales and how much competition there was in the market for each brand and how much such competition is growing. They also consulted experts and looked at the histories of the brands themselves. In the end they came up with a list of twelve brands that they do not believe will survive the end of next year. Many of these brands are big names. Indeed, some of these brands are outright institutions.

As might be expected, two of the brands in 24/7 Wall St.'s "dead pool" are in the automotive industry. 24/7 Wall St. expects GM to close Saturn, its poorest performing division. I very seriously doubt that a Saturn closure would disturb many, but then 24/7 Wall St. also assertrs that when Chrysler LLC restructures, the Chrysler brand will be gone. Quite simply, it is weaker than either either Dodge or Jeep. For those who love classic American cars, this is something may be something of a tragedy. The Chrysler brand came into being when Walter P. Chrysler reorganised the ailing Maxwell Motor Company into Chrysler Corporation in 1925. Throughout the years the Chrysler division produced some of the United States' best loved cars, including the Airflow, the Imperial, the Cordoba, and the Lebaron. Arguably, with the passing of Chrysler we will not simply see the death of a brand, but the passing of an automotive institution.

Another brand that 24/7 Wall St. does not expect to survive the end of next year is also an institution, albeit a magazine rather than automotive company. With magazine sales down, 24/7 Wall St. notes that Hearst will have to cut some of its weakest magazines, among which number Esquire. Esquire was founded in 1932 by Arnold Gingrich as a somewhat racey men's magazine (think of Playboy if it had been founded in the Thirties). In fact, among its greatest claims to fame were its pin-ups, created by such artists as Vargas and George Petty. Esquire would eventually become somewhat respectable, with contributions from such greats as F. Scott Fitzgerald and Ernest Hemingway. In the Sixties it would help pave the way for the New Journalism of Tom Wolfe, Gay Talese, and John Sack. In creating Playboy, Hugh Hefner looked to Esquire for inspiration. If Hearst does indeed cancel Esquire, it will mean the end of a giant in the field of magazines.

A less well known magazine, but one that is as much an institution as Esquire, also faces cancellation. Architectural Digest was founded in 1920 as a Southern California annual publication. Despite its title, Architectural Digest primarily focused on interior design rather than architecture proper. Its readership has generally tended to be upscale and style conscious individuals. Throughout the years it has become a fairly important force in interior design. Unfortunately the past few years have not only seen a decline in home sales, but also in home decorating--especially expensive home decorating. And as noted earlier, magazine sales are in decline. 24/7 Wall St. then expects Architectural Digest to be gone before next year ends.

Also established in 1920 is another company that 24/7 Wall St. believes will not last much longer. Eddie Bauer was founded by the outdoorsman of the same name in 1920. It soon established itself as a force in the field of outdoor clothing. In 1940 they patented the first quilted down jacket. In 1942 Eddie Bauer developed the B-9 Flight Parka for the U. S. Army Air Corps and supplied the Army with everything from backpacks to pants. Eddie Bauer was the first independent company ever employed by the Army and the first allowed to place its logo on an Army uniform. Unfortunately, Eddie Bauer has been losing a good deal of money of late, so much that 24/7 Wall St. guesses it won't survive.

24/7 Wall St. also puts forth that another American airline will go bankrupt, and they believe it will be United Airlines. United Airlines has a history that goes all the way back to Walter Varney's air mail service (Varney Airlines) established on April 6, 1926. In 1930 the company began carrying passengers as well as mail, even hiring Registered Nurse Ellen Church as possibly the first flight attendant. United Airlines became one of the first national carriers. TWA ceased to exist in 2001. Pan-Am in 1991. Sadly, it seems that United might join them.

Other brands on 24/7 Wall St.'s dead pool are not as old as Chrysler, Esquire, Architectural Digest, Eddie Bauer, or United Airlines, but they have had an impact on American culture nonetheless: Old Navy (only dating to 1994, but well known for its interesting adverts), Budget Rent a Car (only founded in 1958, but among the best know car rental companies), and Palm, Inc. (founded in 1992 and well known for the Palm Pilot). While these brands may not be as old or as respected as Chrysler, Esquire, or United Airlines, they have left their mark nonetheless.

Of course, it is tempting to second guess 24/7 Wall Street. I must admit, that as someone who has always loved Chrysler products (my first car was a Plymouth Valiant and my current one is a Dodge Spirit), I find it hard to believe that Chrysler LLC would put an end to the Chrysler brand--at the very least they would continue manufacturing the Town and Country, the brand's best selling model. But then again, the company shut down DeSoto in 1961 and Plymouth in 2001. Would it be too much to believe that they would shut down Chrysler as well? It also seems too frightening to consider that Hearst would cancel Esquire. After all, the magazine has a long and illustrious history. Unfortunately, we are talking about Hearst Corporation. The company not only closed such magazines as Teen (one of the earliest magazines directed at teenage girls--founded 1954) and Quick and Simple, but newspapers such as The Seattle Post-Intelligencer (founded 1863). Would they really spare Esquire?

If these brands do cease to exist, it will be a source of unhappiness for many. Obviously it will mean the loss of jobs. Old Navy has over 1000 stores across the United States and Canada. Eddie Bauer has about 550 stores throughout the United States. One can only imagine the number of people employed by such giants as Chrysler and United Airlines. Any time a brand ceases to exist it means the loss of work, and that can be crippling in these economic times.

While not nearly as important as the loss of jobs, it must also be noted that many of these brands have their own fiercely loyal followings. There may well be individuals who have been subscribed to Esquire for literally decades. I have a friend who is a big fan of Old Navy. I myself love Chrysler cars. Whether because of the quality of their products, their history, or their prestige, brand names actually do mean a good deal to people. Indeed, many remember the gnashing of teeth and pulling out of hair that occurred when Coca-Cola tried to replace their classic brand with "New Coke."

Beyond brand loyalty, however, there is another reason to mourn the passing of particularly well established brands. Brands that have a long history, that long ago infiltrated the American psyche, form a link to our past. They are a bit of constancy in a sometimes crazy world that serve to remind us that no matter how bad times get, there are some things that do survive. They help form a link to our fathers and mothers, our grandfathers and grandmothers, and those who have gone before us. While I have never even read a copy of Architectural Digest, I would be sad at its passing simply because it has lasted 87 years. It was around at a time when Louise Brooks was still acting. It survived the Great Depression. It saw The Beatles and other British bands invade America. Like many of the other brands 24/7 Wall Street discusses, it is an institution. If it were to close, then we would lose another link to our past, another reminder of the constancy of things.


Unknown said...

I saw this on yahoo news the other day-- I will be devastated, absolutely devastated if Old Navy closes. I mean, I will cry. I buy 90% of my clothing there, the only jeans that fit just right, their clearance racks are to die for. Why can't they close Banana Republic? Does anyone actually shop there? Ergh! Not liking this recession one bit!

Raquel Stecher said...

Thank you for writing about this! I'm glad I tweeted it.

I agree with you that the fact that these brands have become part of the American culture and psyche makes their possible imminent demise very sad.

And since my job depends on brands like Borders and Old Navy/Gap/Banana Republic staying alive, I'm particularly hurt by this prediction!

I hope some of these brands will be able to reinvent themselves in a way that keeps them viable in this tough economy so that we can continue to enjoy the brands.

Beantown Brews said...

The trouble is, given the state of these companies, they may not have the money to re-brand themselves.

I am really shocked by the news of Borders. I have always thought they were the better of the larger, chain bookstore brands - and I was a Barnes and Noble Manager!

Raquel Stecher said...

Borders may be a surprise to some, but it's not a surprise to me since I'm in the book industry. Almost daily I hear about how Borders is failing. And industry professionals say that when Borders disappears, all that business disappears with it. Unfortunately, it doesn't just all shift to other sectors of the market. And Borders tried to reinvent itself a lot with the Rewards program, coupons, newsletters, online site, Airport stores, theme stores, etc. I think their failing is they prefer complexity over simplicity. Sometimes less is more.

I am surprised about GAP/Old Navy/Banana Republic though. Maybe they can ditch Banana Republic and keep GAP/Old Navy. It seems like those are more viable options.

Who else thinks Old Navy is using mannequins to save money on models? ::raising hand::

Sorry.. am ranting here.

Terence Towles Canote said...

Thanks for tweeting it, Raquelle! It is an interesting, if frightening topic.

Kate, I have to admit that I was shocked that Old Navy was the weakest of the three brands. I thought it would be Banana Republic. In fact, I thought Old Navy was probably stronger than the Gap.

21stcenturycavepainter, I think a lot of these brands won't have the money to re-invent themselves. In many cases I think they will cease to exist. Anyway, like Raquelle I have to say I am not shocked by Borders, but then I work in customer service for a major publisher of children's books. It is a bit dismaying, but I fear it is too late for Borders to be saved.