6 struggling companies


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Post on 17-Aug-2014



Economy & Finance

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These companies might not be around much longer


Page 1: 6 struggling companies

6 Companies Fighting For Survival

Page 2: 6 struggling companies

J C Penney Co. (NYSE: JCP)• JC Penney’s sales have

been dropping steadily for some time now, with revenue down more than 40% since the 2008 peak

• The company has not turned a profit since 2011

• Further losses are projected in both 2015 and 2016


Page 3: 6 struggling companies

Can J C Penney Turn Things Around?• In order for J C Penney to turn around, a couple

of things need to happen• First, the company needs to learn to capitalize on

its internet sales, which currently make up about 9% of total revenue • So far, so good, with online sales up 5.5% in FY 2014

• Also, the company’s new pricing strategies need to successfully compete with rivals

Page 4: 6 struggling companies

BlackBerry Ltd. (NASDAQ: BBRY)• Once a dominant force in the

smartphone market, BlackBerry has been crippled by intense competition from Apple, Samsung, and other rivals

• Since peaking in 2011, BlackBerry’s revenue has fallen by nearly two-thirds

• For fiscal year 2014, BlackBerry lost $11.18 per share (share price is less than $8

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Can BlackBerry Turn Things Around?• In order to make a comeback, BlackBerry would not

only need to produce new and innovative products, but would need to convince customers to leave their iPhones and Galaxy phones

• This is unlikely, so BlackBerry is shifting its focus away from manufacturing hardware

• Instead, the company is focusing on solutions for corporations, such as its recently announced “Project Ion”

Page 6: 6 struggling companies

Barnes & Noble Inc. (NYSE: BKS)• Barnes & Noble’s

problem is simple: less people buy books than used to

• The Nook e-reader is losing market share, falling from 25% to 20% last year


Page 7: 6 struggling companies

Can Barnes & Noble Turn Things Around?

• The long-term outlook for the bookselling industry is very negative, and the company’s dwindling e-reader market share doesn’t help

• To turn things around, B&N must…• Figure out a way to profitably price-match with rival

Amazon.com• Close its underperforming stores and boost traffic in its high-

performing stores• Stop investing so much in its Nook efforts• Continue to grow its B&N College business, which has been its

primary growth driver in recent years

Page 8: 6 struggling companies

Zynga (NASDAQ: ZNGA)• Down nearly 70% since

its IPO price, Zynga hasn’t capitalized on the shift to smartphone gaming

• Zynga laid off nearly 15% of its workforce in January 2014 alone

• The company is no longer the gaming leader of Facebook, historically its main revenue source

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Can Zynga Turn Things Around?• To stay competitive, Zynga needs to successfully

transition from a Web-based gaming company to a mobile one

• It recently acquired developer NaturalMotion to try to accelerate this process, but there is a long way to go

Page 10: 6 struggling companies

RadioShack Corp. (NYSE: RSH)• RadioShack has seen its

sales plummet dramatically over the past several years

• Shares are down more than 95% from their 2007 peak

• Most recently, RadioShack missed already low earnings expectations, having lost $0.98 per share in the first quarter alone (share price is just $1.41)

Wikipedia/Eduardo P

Page 11: 6 struggling companies

Can Radio Shack Turn Things Around?• Perhaps the most unlikely turnaround of the

companies listed here, RadioShack needs to figure out a way to increase traffic in its stores

• Needs another main revenue stream besides mobile devices

• RadioShack needs to drastically reduce operating expenses to be able to successfully compete with the pricing power of larger competitors

Page 12: 6 struggling companies

Sears Holdings Corp. (NASDAQ: SHLD)

• Sears has seen revenue decline every year since 2007

• The company has lost more than $50 per share since 2012

Flickr/Mike Kalasnik

Page 13: 6 struggling companies

Can Sears Turn Things Around?• In order to turn around, Sears is implementing these strategies

• 106 underperforming stores closed last year• Cross-selling Sears and K-Mart’s proprietary brands• Heavy investment in “Shop your way” rewards program and Sears’

online marketplace• However, it remains to be seen if this is too little, too late

• Sears’ online marketplace has a long way to go to be competitive with Amazon.com and eBay

• Sears’ outdated look and layout of its stores may have driven away longtime customers, and it’s unclear whether this damage can be undone