Sunday, January 24, 2010

TOP UK Brands Wiped Out in Recession

Previous post outlined major US brands leaving american consumers after decades of market operations. Additional polls have been undertaken and thanks to many several other US brands facing similar fate have been named: Gottschalks, Goody’s, Hummer, Rocky Mountain News and Home Depot Expo. As promised, below is presented an analysis of major UK brands we lost in Credit Crunch, followed in the next post by EU Market.

According to financial analysts more than 3,000 UK firms have collapsed into administration last year under the pressure of soaring costs, falling consumer spending and finally the credit crunch.

1. When asked which are major UK brands left behind in recession almost all interviewers pointed firstly at Woolworths:

100-year-old High Street legend Woolworths has buckled under its debt (£385m) closing its 807 stores and leading to over 22000 job losses across the UK. While major news portals such as BBC declare that the store chain has been already in difficulties for years, losing market share against intense competition - on the other hand consumers blame the chain for being highly disorganized "selling a bit of everything" and thus, becomming "outdated". Which opinion is close to your own? Take part in our related poll to express your own view.

The company's weak position was also the reason why the government did not intervene to rescue it. Today Woolworths experiences its 2nd life online - under a Shop Direct umbrella, being part of the Littlewoods group. The firm denied it was "playing on the nostalgia" of the old chain, which opened its first UK shop one hundred years ago in 1909.

2. MFI:

Over 1,350 members of stuff have been made redundant at MFI after the furniture chain called in administrators. It collapsed just hours after Woolworths confirmed it had gone into administration, closing its 110 stores. Major reasons for the company failure were mentioned: severe cash flow pressure as a result of credit insurance being withdrawn across the sector and the failure of certain key suppliers (acc. to MFI statement in Times Online).

3. Wrapit:

The collapse of wedding gift firm Wrapit selling around 3000 wedding gifts a year was one of the most notorious high-profile administrations. Around 2000 distraught couples were left chasing up undelivered presents and over 100 000 guests are thought to have lost money claiming compensation. The company owed £3.5m to its main creditor HSBC and have never made any money in six years of trading, according to KPMG spokesperson.

4. Rosebys:

The 86-year-old curtains and home furnishings chain Rosebys went through a painful sale and break-up process after it was placed into administration in September 2008.
The firm suffered from major UK property slump and high street spending squeeze. It owed trade creditors around £11.7m and inter-company creditors £19m at the time of its administration.

5. Coffee Republic:

After weeks of intense speculation, the coffee chain Coffee Republic announced its failure on July 8th, 2009 (acc. to It was founded in 1995 by the brother and sister team Bobby and Sahar Hashemi in central London and became a regular fixture on the high street, with 187 outlets in the UK and abroad. The company's shares were suspended at 22p after being worth as much as 160p two years ago.

6. Joe Bloggs Clothing:

According to The Independent: Shami Ahmed, the founder of Joe Bloggs and fashion tycoon whose baggy jeans became the uniform of Madchester's rave scene, has been forced into personal bankruptcy by spread betting firms chasing him for millions of pounds owed in gambling debts. He now faces a battle with his former bookies over remaining assets.

7. XL Leisure:

By the end of 2008 UK’s third largest tour operator collapsed in the face of record oil prices,being unable to raise further funding. It is thought that XL had total debts of £400m when it went into administration.

8. Silverjet:

Business-class only airline Silverjet was brought to its knees by the oil price bubble - similar reasons faced by the previously described brand, ceasing its operations in May, 2008. Around 7,000 UK and 2,500 non-UK passengers were affected when it was forced to suspend services and placed into administration. The Luton-based carrier’s collapse came just over a year after its launch.

At no doubt the list may go on and would be interesting finding out what other major UK brands you remeber leaving the market grounds?

Also, do you feel any regrets related to the "faded" brands?

Catch up our next issues on Major Recession Victims on the EU market. Suggestions and comments welcome!


@Digilunch Team
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Thursday, January 14, 2010

TOP 2009 Global Brands Wiped Out by Credit Crunch

Recession has hit hard on both brands and consumers. Consumers started to re-think their value patterns, while brands across the world have found themselves facing the shakespearean "filter": To be or not to be...
Since this test has spread on a worldwide wave, would be interesting to see its effect in major world economies: USA, UK, EU Countries, China, Russia and Japan.
Starting with USA - the recession springhead:

8 Brands we loved and lost in 2009, as seen by CNN:

1. Circuit City (One of major US Retailers):

The 60-year-old US Electronic chain declared its bankrupcy already by the end of 2008. Among major reasons for its fall experts consider: poor management and stuff reductions in favour of cheaper but less knowledgeable work force. Now the brand experiences its "2nd life" - online. Honestly, the entire scenario reminds me of the UK retailer - Woolworth (over 100-year-old retailer, now trying to lodge in cyberspace).

2. Saturn (GM's alternative to smaller, imported cars):

Its law sales rates determined 2010 - the last production year for the 20-year-old brand.

3. Pontiac (GM's owned brand):

GM's close brankrupcy forced the company to concentrate on its "core" brands, so that regretably the 84-year-old brand (as of 1926) hasn't made its way into this list.

4. Saab (GM's Swedesh car brand):

Although GM had announced previously that it was close to reaching a deal with Swedish super-carmaker Koenigsegg, Saab eventually lost its last chance (December, 2009). Saab has been making cars since 1946. At the moment GM is considering selling Saab 9-3 and 9-5 technologies to the Chinese automaker Beijing Automotive Industry Holdings Co. Ltd. Overall, the brand ceasure will leave unemployed over 3400 workers.

5. Kodachrome:

Hit severely by the emerging digital technologies, which basically pulled it out of the consumption market.

6. Max Factor:

P&G announced their pulling out the brand from the US market, based on low popularity indez among its US consumers and corresponding sales figures. I hope this won't spread across the EU countries, I continue to be one of its fans..

7. Gourmet Magazine (60-year-old brand):

One of the most regretable publications faded in 2009. It continues though to appear on: TV, book publications and online recipes sites.

8. Microsoft's Encarta:

Why pay for a content you may easily now get for free on Wikipedia? Undoubtedly, the emerging Web 2.0 phenomena will continue to impact brands and force them either to adapt to the new environment or...pass away.

Which other "fading" brands you regret leaving the US market? Fit in and share your news.

Next markets to follow: EU, Russia and China - looking for your comments and suggestions.

DigiLunch Team
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