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RANCHO RESORT MAINTANANCE POSITION Sales and Marketing Everready Glass Sales Reps Finance and Accounting Charles E. Gillman Company Accounting Specialist Administrative & Professional Tucson Urban League CEO/President Administrative & Professional Jorgensen Brooks Group Counselor Mechanical Komatsu Equipment Co Resident Field Mechanic BusinessFamiliar firms succumb to economic hard timesThe Associated Press
Tucson, Arizona | Published: 01.04.2009
Shoppers won't be picking up ornate lamps from the Bombay Co. this year. Or investing with Lehman Brothers and Bear Stearns. No flying to Hawaii on Aloha Airlines or buying ultra-cheap tickets on Skybus, either.
All those names vanished this past year, victims of the economy, the financial meltdown or other factors. Experts say 2009 could mark the end of even more well-known brands as the now-yearlong recession puts more struggling companies on life support.
"I think 2009 is going to be a bloodbath," said Scott Testa, a marketing professor at St. Joseph's University in Philadelphia. "I think it's going to be very, very ugly."
For some companies, 2008 was no beauty. The woes of the nation's retailers began before the year even started. The Bombay Co., known for its home accessories and furnishings, filed for bankruptcy in the fall of 2007 and closed its last store in January 2008 because of slow sales — an ailment that hurt other companies as the economic downturn turned into a recession.
The casualties weren't limited to retail. Travelers also bid adieu to some airlines in 2008 as jet fuel prices soared and consumer spending on extras like travel plunged. Aloha, ATA, Skybus and Champion Air all grounded their planes.
And two of the biggest names that disappeared this past year took the economy and consumer confidence down with them.
Bear Stearns was headed toward collapse in March, awash in massive losses from toxic securities tied to subprime loans, before the government engineered a fire sale of the 85-year-old investment bank to JPMorgan Chase & Co. And the credit crunch that paralyzed the world economy only got worse after Lehman Brothers, a 158-year old company that helped finance America's railroads, became the biggest bankruptcy in U.S. history.
The ripple effect those two failures had on the economy was evident at malls across the nation. Consumers, already nervous about the falling value of their homes and the security of their jobs, curtailed their spending even more.
With sales and profits dropping this past year and lenders leery of granting new credit, a number of retailers failed. Home goods seller Linens 'N Things began liquidating its stores after originally filing in May for Chapter 11 bankruptcy protection. Apparel chain Steve & Barry's did the same later in the year. Catalog retailer Lillian Vernon Corp. and specialty retailer Sharper Image Corp. also vanished. KB Toys is in the midst of restructuring its business and is liquidating its more than 400 stores.
Of all the brands to disappear in 2008, Testa said, consumers may miss department store chain Mervyns the most since so many shoppers had a connection to the store. "That's a brand that's been around for a very long time," he said.
The vanishing acts weren't just in the United States. British retailer Woolworths Group PLC collapsed late last year after it was unable to sell its 800-store business. The last store is set to close Monday.
Beyond the brand names customers will no longer see, retailers may operate far fewer stores or only sell their goods online. Banks may become subsidiaries of those that bought them.
Circuit City Stores Inc., the nation's second-biggest electronics retailer, is closing more than 150 stores and laying off thousands of employees as it keeps operating and attempts to restructure under Chapter 11 bankruptcy protection.
Now, companies will have to find ways to stand out, and that includes making sure customers picky about where they spend their money have a better experience, said Rita Rodriguez, chief executive for the U.S. division of The Brand Union, a firm that helps companies create brand identities.
"The brand is going to have a bigger opportunity to stand out and to articulate a promise and to deliver the experience," she said. "And it's going to have to do that in 2009."
disappearing companies
Amid a deepening recession, a number of big-name brands filed for bankruptcy protection or went out of business in 2008. Here's a list of some of the biggest:
Retailers
• Mervyns LLC filed for Chapter 11 bankruptcy protection in July and began liquidation sales at its remaining stores to wind down its business.
• Linens 'N Things filed for bankruptcy protection in May. It announced liquidation sales at its stores in October after failing to find a buyer that wanted to operate the company.
• Steve & Barry's filed for Chapter 11 bankruptcy protection in July, then later abandoned plans to keep stores open and said it would liquidate.
• KB Toys filed for bankruptcy protection two weeks before Christmas and has begun to liquidate its stores and plans to shutter operations. It is the second time KB Toys filed for bankruptcy protection; the first was in January 2004.
• Sharper Image Corp. filed for bankruptcy protection in February and closed all its stores in the past year.
• Woolworths Group PLC in the United Kingdom failed to find a buyer in December and put its nearly century-old retail business into administration. It is closing its 800 stores in stages that are set to end Monday.
• The Bombay Co. declared bankruptcy in September 2007 and closed the last of its stores in January.
Banks or investment firms
• Bear Stearns Cos. was bought by JPMorgan Chase & Co. in March in a deal orchestrated by the government after a sharp decline in shares and a collapse in confidence in the company.
• Lehman Brothers Holdings Inc. declared bankruptcy in September, the largest ever in the United States, less than a week after reporting a $4 billion loss.
Airlines
• ATA Airlines filed for bankruptcy April 2 and abruptly ceased operations the next day.
• Aloha Airlines shut down its passenger service in March, shortly after filing for bankruptcy.
• Low-cost Skybus Airlines filed for bankruptcy protection in April, less than a year after it began.
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