Yahoo! compiled a list of the 15 companies it thinks may cease to exist in 2009. Some of the names on the list are surprising.
Rite Aid. This drugstore chain tried to boost its performance by acquiring competitors Brooks and Eckerd in 2007. But there have been some nasty side effects, like a huge debt load that makes it the most leveraged drugstore chain in the U.S. Prognosis: Mounting losses, with no turnaround in sight.
Claire’s Stores. The Apollo Group paid $3.1 billion for this trendy teen-focused accessory store in 2007. But cash flow has been negative for much of the past year and analysts believe Claire’s is close to defaulting on its debt. A horrible retail outlook for 2009 offers no relief, suggesting Claire’s could follow Linens ‘n Things.
Chrysler. It’s never a good sign when management insists the company is not going out of business, which is what CEO Bob Nardelli has been doing lately. Chrysler may be the weakling that can’t cut it in tough times.
Sbarro. Many of this chain’s 1,100 storefronts are in malls. Sbarro can’t really boost revenue by adding a breakfast or late-night menu. Competitors like Domino’s and Pizza Hut have less debt and stronger cash flow.
Six Flags. This theme-park operator has been losing money for several years. Moody’s expects cash flow to be negative in 2009 and that could imperil the company’s ability to pay debts coming due later this year and in 2010.
Blockbuster. The video-rental chain has burned cash while trying to figure out how to maximize fees without alienating customers. Video stores in general are under pressure as they compete with cable and Internet operators offering the same titles.
Krispy Kreme. This chain over-expanded during the donut heyday of the 1990s. The company has cut costs and closed under-performing stores, but still hasn’t earned an operating profit in three years.
Sirius Satellite Radio. Satellite radio has yet to be profitable and huge contracts for performers like Howard Stern are looking unsustainable. The merger with XM hasn’t generated the savings needed to make the company profitable.
See the complete list here.
What do you think? Who falls off the retail landscape in 2009?
Me? I’m sticking to my original prediction made back in September … National City Bank (since announced they would be acquired by PNC Bank), Sun Country Airlines, Circuit City (since announced they were going out of business), United Airlines and Spirit Airlines. And, to this prediction made in December … Dillards, Pier 1, Rite-Aid, Gap (including Old Navy & Banana Republic) and Sears (including K-Mart).
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