10 famous brands that almost went bankrupt
• World-famous companies seem to be unsinkable colossi that can withstand the most severe storm on the sea of business. However, many of them had to "get out of the grave", sometimes more than once.
• In this article, you will learn about ten popular brands that were very close to bankruptcy.
BMW emerged from World War II with serious financial and infrastructural problems. Its factories were bombed, and the company was temporarily banned from resuming car production. So she survived by selling household goods, bicycles, and later low-powered motorcycles.
• Poor sales of its first post-war 501 car and a small profit from the Isetta three-wheeled subcompact brought BMW to a financial abyss. The sporty 507 roadster, introduced in 1956, failed to live up to expectations, and its high production costs added additional burden to the automaker.
• The situation was so dramatic that BMW almost took over from Mercedes-Benz. But a few months before the deal was finally negotiated, the BMW 700, a small, rear-engined, unibody sedan, hit the market.
• With superior handling and ease of maintenance, the 700 was an instant hit and got BMW back on track.
• This car was followed in 1962 by the New Class series, which restored BMW as a solid and financially independent automaker. It was the New Class that ultimately spawned the iconic 3 and 5 Series models.
9 The Walt Disney Company
Walt Disney is a director, animator and creative genius who founded his first company in 1920. Studio Laugh-O-Gram, which, in addition to Disney, had 5 other key figures, created short advertising films and cartoons. Disney even had a deal with a New York distribution company to show his films in theaters.
• But in 1922 things went wrong. The distributor began swindling money out of Disney, leaving the director short of the funds he needed to cover his bills. Faced with mounting debt, Walt Disney filed for bankruptcy in 1923.
• That same year, Walt Disney created a new film company by taking out a loan from his parents and brother. His debts were cleared and the new company properly funded, and in 1928 Disney created his most iconic character, Mickey Mouse. Nearly a decade after that, he released Snow White and the Seven Dwarfs, and the rest is history.
Due to the global recession and strong competition from Dunkin Donuts and McDonald's, Starbucks shares lost 42% of their value in 2007.
• With the introduction of a new line of hot sandwiches and a growing focus on music and in-store merchandise, the company has lost the coffeehouse flavor that made it popular.
• Howard Schultz returned to his position as CEO in January 2008 and began work on modernizing the company. He started by narrowing the focus of Starbucks and putting coffee first. There were also layoffs of 600 stores and layoffs of 12000 employees.
• In 2008, Starbucks closed all of its 7100 U.S. stores for a few hours to conduct a refresher course for employees. It was not cheap, but it attracted the attention of the press. The company has also implemented a loyalty rewards program to keep its customers during the economic downturn.
• By the end, the company was back on track with almost $11 billion in annual revenue.
In 2014, the failure of the Wii U handheld console saw the company post three consecutive financial years of operating losses for the first time in its 125-year history. And some industry observers have even wondered if Nintendo should still make game consoles.
• Skeptics were put to shame in 2017 with the release of the Nintendo Switch, a hybrid handheld device and game console that allows you to play on the user's TV or on the built-in screen of a mobile tablet.
• After integrating the console and handheld divisions in 2013, Nintendo was able to move game developers between different projects, which was used to ensure a stable release of well-established games.
• The company has also fixed the Wii U's long boot times by creating a streamlined experience that allows players to turn on the device and enter gameplay with three button presses.
In 2003, faced with declining sales and many failed business ventures, the famous company nearly went bankrupt. Her debt at the time was $800 million.
• Things improved for Lego, however, when Jørgen Vig Knudstorp took over as director in 2004. He cut costs in several ways, including:
- got rid of non-core assets such as theme parks,
- reduced the variety of parts for designers,
- halved the time from the start of development to the launch of products in a series,
- moved part of its production from Denmark to less expensive areas of Mexico and Central Europe.
• In addition, Lego began partnering with video game companies and film studios to create crossover media. The Lego Movie, produced by Warner Brothers in 2014, was a hit that helped Lego increase its profits by 15% year-over-year.
• The company also encourages its fans to submit their own designs and ideas: winning entries receive 1% of global sales upon product release.
Closest we got about a month. The Model 3 ramp was extreme stress & pain for a long time — from mid 2017 to mid 2019. Production & logistics hell.
- Elon Musk (@elonmusk)
• At the beginning, the market capitalization of Elon Musk's company exceeded $770 billion, ahead of such giants as Facebook and Tencent.
• However, in one of his Twitter posts, Musk admitted that Tesla was "a month" away from bankruptcy during the start of Model 3 production (mid-2017 to mid-XNUMX).
• Musk has often spoken of what he calls "manufacturing and logistical hell" when a new electric vehicle enters mass production. However, Tesla's management never disclosed how small the runway was before the company could face bankruptcy.
Between 2007 and 2012, Nokia lost 96% of its market share to Apple and Android devices. But thanks to a successful turn, Nokia today exists as a $28 billion company and is one of the leaders in the network equipment market.
• In 2013, the company sold its smartphone business to Microsoft Corporation for $7,6 billion. Nokia then turned its attention to its network infrastructure business.
• In June, the Finns paid $2,2 billion to gain full control of a telecommunications equipment joint venture with Siemens. And in 2015, Nokia bought its rival Alcatel-Lucent for $16,6 billion.
• However, Nokia has not completely “tied up” with smartphones. In 2016, Microsoft sold Nokia's mobile business to a Finnish company called HMD Global. Now she is developing and selling devices under the Nokia brand, and the company of the same name receives royalties for patents.
3. General Motors
In 2009, the US undertook one of the most remarkable private sector interventions in the country's history. The government invested nearly $50 billion in General Motors in exchange for a 60% stake in the bankrupt automaker.
• Then-CEO Fritz Henderson asked more than 400 of the company's 1300 executives to resign, followed by cuts to car dealerships, employees and entire divisions like Pontiac and Saturn. Thanks to these changes, by the end of a fairly "thinner" GM has reached profitability for 15 consecutive quarters.
• However, 2014 brought bad news – a malfunction in the ignition switch led to numerous fatal accidents and the recall of nearly 30 million vehicles. The move cost GM more than $4 billion.
• In the years since, the company has rebounded under the leadership of Mary Barra, the company's first female CEO and GM veteran.
Near-death experiences are common for Marvel characters, but so have the company that created them.
• Marvel went bankrupt in late 1996 after the comic book collector's market crashed. With the help of Isaac Perlmutter and his toy company Toy Biz, she managed to get out of the financial hole in July 1997 and quickly found a stable footing at Marvel Studios, which was formed shortly before bankruptcy.
• While previous Marvel film projects had been delayed after being sold to major studios, the new studio allowed Marvel to speed up the process by commissioning scripts and hiring key actors and directors. Movies like Blade, X-Men, and especially Spider-Man have been successful at the box office, and Marvel has enjoyed huge growth in comic book sales and other licensing opportunities.
• But the lion's share of the proceeds went to film studios that owned the rights to Marvel characters, such as Sony Pictures. The first two Spider-Man movies grossed $3 billion worldwide, while Marvel only made $62 million of them.
• As a result, the board of directors of Marvel went to a potentially risky deal with Merrill Lynch to finance the production of Marvel films from start to finish. And the first film shot under the new deal was Iron Man. It grossed nearly $600 million worldwide.
• The film's success inspired Disney's $4 billion acquisition of the company in 2009 and was a critical factor in the creation of the Marvel Cinematic Universe, which has only grown ever since.
Today it is almost impossible to imagine a world without Apple, but in 1997 this company was “on life support” when Steve Jobs returned to it after a long break.
• According to Walter Isaacson's biography of Jobs, the company was 90 days from bankruptcy.
• Apple's recovery began with a $150 million investment from Microsoft. They became part of a peace pact that Microsoft entered into to protect against antitrust charges. Bill Gates' company kept its biggest competitor afloat.
• Jobs then set to work reducing Apple's product offering so that the company could focus on selling a small number of innovative devices. He laid off 3000 employees and discontinued about 70% of Apple products, including the Newton MessagePad.
• These measures paid off the following year, with the release of the iMac. With a sleek, translucent design and easy Internet setup, this consumer-friendly desktop computer sold nearly 800 units in its first 000 months. The success of the product made 5 the first profitable year for Apple since 1998.
• Today, Apple is a $300 billion company and synonymous with attractive gadget design. But all this could never have happened without the financial help of Microsoft and the titanic efforts of Steve Jobs.