# Seems like a lot of companies are teetering on the brink right now. **URL:** \ **Category:** In My Humble Opinion\ **Created:** [September 26, 2014, 4:19pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649 "2014-09-26T16:19:22Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [September 27, 2014, 4:44pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/21 "2014-09-27T16:44:14Z")
> [@enipla](#): > > I think Volvo has got out of cars, and into trucks. Semi-tractors, and heavy equipment. > > There are a LOT of Volvo trucks on the road in the US. Long haulers. Yes. AB Volvo sold the car business to Ford in 1999 and the auto business is now owned by Geely of China. > [@Voyager](#): > > How about Dell? Their selling point, buying a computer on-line, is no longer a distinction, and people seem to hate them. They have vanished as a choice for PC purchases in my company. But the PC business is dying. So last year, Michael Dell took the company private so he could transition to becoming an enterprise systems provider without needing to keep Wall Sreet happy. > [@SpoilerVirgin](#): > > > [@Senegoid](#): > > > > In other news, I’ve seen several recent articles saying that McDonald’s is waning, being unable to keep up with various new generations of fast-food joints like Chipotle and others. > > Shot themselves in the foot there. McD’s invested in Chipotle when it was just a few restaurants, and then divested 8 years later after it had gotten big. When McDonalds sold Chipotle, there were about 500 Chipotle locations, so it was already getting bigger. Currently, Chipotle’s revenues are about ten percent of McDonalds, so even if McDonalds still owned Chipotle, it wouldn’t be significant. And it would be a distraction, given the very different cuisine. McDonalds strategy seems to be to stick very closely to its core product. That makes sense. ---
**Author:** ![Diceman](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Diceman](https://boards.straightdope.com/u/Diceman)\ **Post date:** [September 27, 2014, 5:43pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/22 "2014-09-27T17:43:49Z")
> [@enipla](#): > > I think Volvo has got out of cars, and into trucks. Semi-tractors, and heavy equipment. > > There are a LOT of Volvo trucks on the road in the US. Long haulers. Volvo trucks is a different company from Volvo cars. The trucks are doing OK, but the cars are on life support. Target is definitely a step or five up from WalMart. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 27, 2014, 8:41pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/23 "2014-09-27T20:41:33Z")
> [@Dewey\_Finn](#): > > But the PC business is dying. So last year, Michael Dell took the company private so he could transition to becoming an enterprise systems provider without needing to keep Wall Sreet happy. But people make money in the enterprise through service and consulting contracts, and business services. Is Dell going to gain a foothold there? Not at all clear. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [September 27, 2014, 9:11pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/24 "2014-09-27T21:11:02Z")
Five years ago, Dell bought Perot Systems Corp specifically to _get_ a foothold in the services business. ---
**Author:** ![Rachellelogram](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rachellelogram/32/8689_2.png) [@Rachellelogram](https://boards.straightdope.com/u/Rachellelogram)\ **Post date:** [September 27, 2014, 9:14pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/25 "2014-09-27T21:14:10Z")
Staples would be in this boat, if their online presence weren’t so robust. My fiance worked there for 5 years (just got a better job, thank god) and they’re in the process of restructuring and closing a shitload of stores (and yeah, layoffs). It’s been going on for a couple years and it’s getting worse (for the retail employees, anyway). They won’t go down the tubes, but they’re transitioning from storefronts to mostly online. ---
**Author:** ![Diceman](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Diceman](https://boards.straightdope.com/u/Diceman)\ **Post date:** [September 28, 2014, 2:22am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/26 "2014-09-28T02:22:59Z")
> [@HubZilla](#): > > How about a city? Atlantic City. > > Lost 4 of it’s 12 casinos since the beginning of 2014 (and a 5th, Trump Taj Mahal, might be next). > > Lost a lot of business to other nearby states getting casinos. > > I should add casinos are pretty much all Atlantic City has going for it. Walk one block from the boardwalk and you may as well be in Newark or Camden (with all due respect to those cities). If it wasn’t for all the hookers, Las Vegas would probably be in the same boat as Atlantic City. You can gamble almost anywhere now. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [September 28, 2014, 3:01am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/27 "2014-09-28T03:01:18Z")
> [@Senegoid](#): > > This just in! Hooters just isn’t racy enough anymore. Make way for [Twin Peaks](http://www.businessweek.com/articles/2014-09-25/inside-twin-peaks-americas-fastest-growing-restaurant-chain), new restaurant chain with waitresses dressed even skimpier. This has been in the news, in several articles I’ve seen, just in the last day or two. Strangely enough, a Twin Peaks opened about 2 blocks from my office, and poached all the hot girls from the Hooters next door to our office. Of course, we still go to Hooters because it’s within walking distance, versus Twin Peaks, which is across a major highway. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [September 28, 2014, 3:13am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/28 "2014-09-28T03:13:22Z")
> [@usedtobe](#): > > Don’t remember the third, but Target is dead meat - they are trying to be Wal-Mart - in markets with a Wal-Mart or two already in place. Boy, I don’t think you could be more wrong. TGT is a healthy company with good earnings, share price and dividends. Yes, the company’s efforts to expand into Canada appear to be failing, but the important takeaway is that they’re trying to expand. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [September 28, 2014, 3:19am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/29 "2014-09-28T03:19:33Z")
> [@Senegoid](#): > > This just in! Hooters just isn’t racy enough anymore. Make way for [Twin Peaks](http://www.businessweek.com/articles/2014-09-25/inside-twin-peaks-americas-fastest-growing-restaurant-chain), new restaurant chain with waitresses dressed even skimpier. This has been in the news, in several articles I’ve seen, just in the last day or two… Not just those two. There’s also Tilted Kilt and others. See the Wikipedia article on “[breastaurants](https://en.wikipedia.org/wiki/Breastaurant).” ---
**Author:** ![JKellyMap](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jkellymap/32/15880_2.png) [@JKellyMap](https://boards.straightdope.com/u/JKellyMap)\ **Post date:** [September 28, 2014, 11:13am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/30 "2014-09-28T11:13:41Z")
> [@Dewey\_Finn](#): > > Not just those two. There’s also Tilted Kilt and others. See the Wikipedia article on “[breastaurants](https://en.wikipedia.org/wiki/Breastaurant).” I didn’t realize such large swaths of the country lack internet or cellular telephone services. 😉 ---
**Author:** ![nevadaexile](https://avatars.discourse-cdn.com/v4/letter/n/eb8c5e/32.png) [@nevadaexile](https://boards.straightdope.com/u/nevadaexile)\ **Post date:** [September 29, 2014, 1:15am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/31 "2014-09-29T01:15:06Z")
**Dardens** , the owner of **Olive Garden** and \*\*Red Lobster \*\*restaurant chains is circling the drain. They are trying to jettison both and they are finding it hard to do so. Both chains are hemorrhaging customers and neither will likely be around in the five years or so. Regionally (the Midwest) **Carlos O’Kelly’s** and \*\*O’Charley’s \*\*(another two restaurant chains) are closing locations. The town that I live went from two to none in less than a year. People are eating out less due to uncertainty about the economy. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [September 29, 2014, 1:23am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/32 "2014-09-29T01:23:28Z")
I have a firm rule that I never invest in Restaurant companies. Unless you’re in for the initial boom and then cash out, there is no long term upside. JC Pennys and Sears have suffered from not keeping up with the times and completely failing on the Internet. Both companies used to have awesome catalog business, but of course that was mostly gone by the time the Internet came around. Hell, the Sears Roebook Catalog built and furnished half of America once upon a time. Imagine if Sears had parlayed that into an Amazon level web business. Kmart. Ugh. I don’t know. How do you completely fuck up in the generic superstore category? Target and Walmart and a few others make it work, how did Kmart screw it up? Bad management, dirty stores, lack of updating. Businesses come and go. Seems most of them go, even the really big ones, due to bad management with no vision. It isn’t enough to run the company you have today. You have to work on where the company will be tomorrow. ---
**Author:** ![pullin](https://avatars.discourse-cdn.com/v4/letter/p/c57346/32.png) [@pullin](https://boards.straightdope.com/u/pullin)\ **Post date:** [September 29, 2014, 10:24am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/33 "2014-09-29T10:24:50Z")
> [@nevadaexile](#): > > **Dardens** , the owner of **Olive Garden** and \*\*Red Lobster \*\*restaurant chains is circling the drain. They are trying to jettison both and they are finding it hard to do so. Both chains are hemorrhaging customers and neither will likely be around in the five years or so. > > Regionally (the Midwest) **Carlos O’Kelly’s** and \*\*O’Charley’s \*\*(another two restaurant chains) are closing locations. The town that I live went from two to none in less than a year. People are eating out less due to uncertainty about the economy. I’ve been wanting to ask about this, but the question never seemed worth of its own thread. Is the restaurant industry (as a whole) in trouble? I seem to see a constant cycle of: lose some customers-\>increase cost-\>lose more customers-\>increase cost again. Until the business closes. We’re empty-nesters with plenty of time and no money problems, but we find ourselves eating at home more and more. Each time we think about going to a restaurant, we talk ourselves out of it because the cost just isn’t worth the pleasure of the meal. We’ve wondered where this will all end up. Sorry for the minor hijack, but I’m curious what others here think. ---
**Author:** ![Grrr](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/grrr/32/146_2.png) [@Grrr](https://boards.straightdope.com/u/Grrr)\ **Post date:** [September 29, 2014, 11:57am UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/34 "2014-09-29T11:57:43Z")
> [@Little\_Nemo](#): > > Here’s some stories I found: > > [Is Netflix About to be a Has-Been? Suddenly, Problems Seem Overwhelming](http://www.forbes.com/sites/ycharts/2012/05/02/is-netflix-about-to-be-a-has-been-suddenly-problems-seem-overwhelming/) > [Netflix in Financial Trouble? Company’s Cash-Raising Spells Potential Problems](http://stopthecap.com/2011/11/22/netflix-in-financial-trouble-companys-cash-raising-spells-potential-problems/) > [Why the Netflix Stock Drama May Not Have a Happy Ending](http://www.cnbc.com/id/100412720) > [Why Netflix Will Never Be Great Again](http://www.dailyfinance.com/2012/04/25/why-netflix-will-never-be-great-again/) > [Do Netflix’s Lost Movies Highlight a Bigger Problem?](http://www.fool.com/investing/general/2013/05/02/do-netflixs-lost-movies-highlight-a-bigger-problem.aspx) > [Netflix Has a Bigger Problem Than You Think](http://www.fool.com/investing/general/2011/09/15/netflix-has-a-bigger-problem-than-you-think.aspx) > [Here’s where Netflix could see trouble](http://finance.yahoo.com/blogs/talking-numbers/here-s-where-netflix-could-see-trouble-211552139.html) > [Netflix has an identity problem](http://fortune.com/2012/08/22/netflix-has-an-identity-problem/) > [Why Netflix’s Financials Are A House Of Cards](http://chartianity.wordpress.com/2013/07/22/why-netflixs-financials-are-a-house-of-cards/) > > Now granted, these articles range from 2014 back to 2011. The company has obviously survived the early predictions by now. But this does represent four years of articles from various financial media. That’s serious smoke. If you Google 'Netflix profits" you’ll see a list as long as your arm about how their profits are going up. One link even said they doubled. And another link said they may be profitable in ?Europe soon… ---
**Author:** ![Diceman](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Diceman](https://boards.straightdope.com/u/Diceman)\ **Post date:** [September 29, 2014, 2:49pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/35 "2014-09-29T14:49:15Z")
> [@pullin](#): > > I’ve been wanting to ask about this, but the question never seemed worth of its own thread. Is the restaurant industry (as a whole) in trouble? I seem to see a constant cycle of: lose some customers-\>increase cost-\>lose more customers-\>increase cost again. Until the business closes. We’re empty-nesters with plenty of time and no money problems, but we find ourselves eating at home more and more. Each time we think about going to a restaurant, we talk ourselves out of it because the cost just isn’t worth the pleasure of the meal. We’ve wondered where this will all end up. > > Sorry for the minor hijack, but I’m curious what others here think. Restaurants have always seemed to come & go at a fairly steady pace. I think part of the problem is that certain types of restaurants become trendy, and a whole bunch open up all over the place, and then some years later when people are tired of that type of food, they mostly go out of business, because short of completely revamping the menu & changing its theme there’s really not much that can be done to save an out-of-fashion retaurant. Also, uncertain economic times tend to cause people to eat out less, and in general spend less money. This squeezes all restaurants. ---
**Author:** ![etv78](https://avatars.discourse-cdn.com/v4/letter/e/d78d45/32.png) [@etv78](https://boards.straightdope.com/u/etv78)\ **Post date:** [September 29, 2014, 2:52pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/36 "2014-09-29T14:52:41Z")
Why wouldn’t YUM brands be interested in those restaurants? Expand their foothold. ---
**Author:** ![jacobsta811](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jacobsta811/32/2893_2.png) [@jacobsta811](https://boards.straightdope.com/u/jacobsta811)\ **Post date:** [September 29, 2014, 4:37pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/37 "2014-09-29T16:37:56Z")
> [@Chimera](#): > > Kmart. Ugh. I don’t know. How do you completely fuck up in the generic superstore category? Target and Walmart and a few others make it work, how did Kmart screw it up? Bad management, dirty stores, lack of updating. > **[Ames Department Stores](https://en.wikipedia.org/wiki/Ames_%28store%29)** > > Peter Hollis, President and CEO > Milton Gilman, Co-Founder and Chairman > Irving Gilman, Co-Founder and President It’s happened before, and it will happen again. Walmart themselves are starting down the path. They aren’t anywhere near too far gone to save (unlike Kmart). ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [September 29, 2014, 5:05pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/38 "2014-09-29T17:05:26Z")
As to restaurants … My theory is we’re looking at two superimposed trends. 1. Any given chain / idea / concept only has a few years of staying power. Sure there are exceptions, but lots of “fast casual” concepts are so many duplicates of the others. There are, or have been, dozens of TGIF clones and near-clones for instance. So a smart restaurant operations company has multiple brands. They fully expect to close all their e.g. Bennigan’s premium burger/steak joints after 10-15 years and replace them all with, say, Senor Yamoto Spanish-Japanese fusion joints. More commonly, the folks who start a successful brand don’t have the skill or luck to do it twice. So as e.g. Bennigan’s fortunes decline, so does the parent company. Some outifts, e.g. YUM, can buy mature properties and run them awhile. But they need to be smart about not investing too late in the lifecycle of any given brand. And be willing to euthanize the failing ones, rather than putting them on expensive and ultimately unsuccessful long-term life support. So yes, we are seeing established restaurant brands dying. But unless you also pay attention to the new ones being born, you’re deliberately ignoring about 1/2 the picture. And ignoring half the picture is a sure way to misunderstand what’s really happening. Trend 2 is the ebb and flow of eating out as such. From the 1970s to about 2007 the overall trend for restaurant dining in the US was nowhere but up. It was also extending farther and farther down the socio-economic ladder. It seems that upon the crash of 2008 things went way down. Then recovered some, but now are burbling along more or less level to slightly down. In other words, more or less echoing the plight of the Middle Class. Restaurants at the high end seem to be doing just fine. So when trying to understand the total picture, you need to look at both trend 1 and trend 2 to understand what’s happening. There’s also a third trend-driver: your local economy. Mom & Pop joints in Detroit are struggling more than Mom & Pops in Atlanta. Likewise the franchise fast foods in Nowheresville, Mississippi are struggling more those in in oil-booming Nowheresville, North Dakota ---
**Author:** ![Dendarii\_Dame](https://avatars.discourse-cdn.com/v4/letter/d/bbce88/32.png) [@Dendarii\_Dame](https://boards.straightdope.com/u/Dendarii_Dame)\ **Post date:** [September 29, 2014, 6:03pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/39 "2014-09-29T18:03:31Z")
I went to a Sears last week. They have shopping carts there, and I took one and discovered that there were two spiderwebs in it. I can’t think that that’s good news. ---
**Author:** ![Diceman](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Diceman](https://boards.straightdope.com/u/Diceman)\ **Post date:** [September 29, 2014, 6:16pm UTC](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649/40 "2014-09-29T18:16:32Z")
> [@LSLGuy](#): > > Some outifts, e.g. YUM, can buy mature properties and run them awhile. But they need to be smart about not investing too late in the lifecycle of any given brand. And be willing to euthanize the failing ones, rather than putting them on expensive and ultimately unsuccessful long-term life support. I looked up YUM Brands on Wikipedia, and it seems they are indeed willing to shitcan over-the-hill restaurants. In 2011, they closed Pasta Bravo and sold off A&W and Long John Silvers. I’m surprised to find out Long Johns is still around. Around here, they almost all closed years ago. There was 1 remaining location that I used to drive past on my commute (in a rather ghettoish area), and I even stopped there a couple of times, but since I moved I don’t go that way anymore. I think there’s still an A&W at the local mall. It’s way off the food court, and I’ve always been a little surprised that it manages to stay in business. [Previous page](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649.md?page=1) [Next page](https://boards.straightdope.com/t/seems-like-a-lot-of-companies-are-teetering-on-the-brink-right-now/699649.md?page=3)