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24/7 Wall St. just published its annual list of 10 brands predicted to disappear within the next 18 months. Among them were Lululemon and Aeropostale, two currently-struggling retailers that are losing out thanks to weird marketing maneuvers and kids who don't want to all look the same anymore.
The site ranked each brand based on the following criteria: "declining sales and losses, disclosures by the parent of the brand that it might go out of business, rising costs that are unlikely to be recouped through higher prices, companies that are sold, companies that go into bankruptcy, companies that have lost the great majority of their customers, and operations with withering market share."
Lululemon made the list based on the a few large missteps and the fallout that resulted, including when CEO Christine Day was fired and when founder Chip Wilson stepped down from his position at the end of last year. Now Wilson is back and looking to buy out the company if he can find a private equity backer, which he believes will happen. On top of that, Lululemon's net income has sunk incredibly low compared to last year, from $47 million to $19 million, and its stock is down 50% from the peak of last year.
Aeropostale may have even less of a fighting chance than Lululemon. 24/7 Wall St. acknowledged that Aeropostale's entire sector of the retail industry was in trouble, but Aeropostale is suffering the most from declining sales and the general unpopularity of branded clothing among the current generation of teenagers. The retailer's net loss is currently at $77 million, way up from last year's $12 million. Aeropostale's stock price continues to plummet, currently down by 85% compared to the price five years ago.
· 10 Brands That Will Disappear in 2015 [24/7 Wall St]
· Lululemon's Manifesto Preaches Against Sunscreen [Racked]
· Can Once-Mighty Teen Retailer Aeropostale Save Itself? [Racked]