Home > Personal Finance > 10 Great Companies That Came Back from the Brink of Death

Comments 0 Comments

Macy’s is closing stores. The Limited is bankrupt and shuttering locations around the country. Long-suffering Sears may not be able to last until 2018. Theranos, the disgraced blood testing company once valued at $9 billion, is as good as dead. Every year, American companies large and small succumb to bankruptcy or disappear when they’re swallowed up by larger rivals. While it’s sometimes sad to see a favorite brand go, these failures are a normal part of the business cycle, and experts love to predict which will be next to go.

But sometimes, the corporate deathwatch crowd gets it wrong. Just as history is littered with examples of once dominant businesses that failed, such as Kodak and PanAm, there are also plenty of companies that teetered on the edge of disaster and somehow recovered.

Corporate turnarounds are the dramatic comeback victories of the business world. Just when you’re ready to count a company (or a team) out, they manage to pull it together and eke out a victory. And as with sports, those come-from-behind successes are often engineered by an inspired coach-slash-CEO. Apple likely never would have become the powerhouse it is today without the visionary leadership of Steve Jobs, nor would have Starbucks survived its growing pains if former CEO Howard Schultz hadn’t returned to address the company’s problems.

Of course, a genius CEO isn’t the only thing you need to engineer a turnaround. Great products, smart marketing, talented employees, and, in some cases, a little help from the government, are important too. Fortunately, all of the 10 great companies on this list had those things, allowing them to stage some of the most dramatic corporate comebacks in history.

1. Apple

When it comes to corporate turnaround stories, there may be none more famous than Apple’s. It’s easy to forget now that Apple is the most valuable company in the world, but there was a time when the tech giant was teetering on the edge of bankruptcy. Twenty years ago, the media was predicting the death of the company and it was losing $1 billion a year. All that changed when founder Steve Jobs returned to the fold, launching revolutionary products like the iMac and, eventually, the iPod. Now, Apple products are ubiquitous, from iPhones to iTunes, and people are wishing they’d picked up some of the company’s stock when it was at bargain-basement prices.

2. Best Buy

Best Buy is the world’s largest brick-and-mortar electronics store, but a few years ago, it looked like it might join former competitors like Circuit City in the retail graveyard. In 2010, sales and profits were way down, and a scandal involving the then-CEO in 2012 only made things worse, as Salon reported. Remarkably, the company managed to turn itself around. The new CEO cleaned up disorganized stores, shuttered failing locations, brought in exclusive products, and improved service. Most important, the chain integrated the online and in-store experiences, making it easy to research products online and staffing stores with employees who were experts in popular brands like Samsung and Apple. Customers returned, and by 2016, both profits and the company’s stock price were up.

3. Marvel

These days, it’s not summer (or, really, any other time of the year) without a big-budget superhero flick from Marvel. But 20 years ago, Marvel was bankrupt and casting about for a new direction, as ScreenCrush reported. The company had a huge stable of comic book properties, but it didn’t seem to know what to do with them. While rival DC Comics had managed to turn iconic characters like Batman and Superman into blockbuster movie franchises, Marvel’s attempts to turn its superheroes into silver screen stars failed miserably, such as the infamous 1986 flop Howard the Duck.

Starting in the late ‘90s, licensing deals brought some of Marvel’s characters, like Spider-Man, the X-Men, and Blade, to theaters in successful films. But the company still wasn’t making much money. So, it decided to start its own studio. The ambitious gambit worked. The company was eventually acquired by Disney and now Marvel regularly churns out movies that make money hand-over-fist.

4. GM

GM, one of America’s biggest automakers, nearly ended up in the junkyard following the 2008 financial crisis. Only a $50 million government bailout saved the car company, but with the infusion of cash, GM was able to turn itself around. That’s not to say there haven’t been problems since, particularly several big recalls involving faulty ignition switches and airbag glitches. But people kept buying their cars and trucks anyway, and earnings in the third quarter of 2016 were much higher than expected and sales were up 10% in December 2016.

5. AIG

Big automakers weren’t the only businesses the government bailed out during the financial crisis. Insurer AIG was also propped up by the government, which at one point owned virtually all of the company, but the company came through the dark times. AIG bought back its stock and is now the leading seller of fixed and variable annuities in the United States, according to InsuranceNewsNet.

6. IBM

IBM is one of just a handful of companies that has managed to keep its spot on the Fortune 500 list for more than half a century. Yet in the early 1990s, “Big Blue” nearly went the way of the dodo. In 1992, it lost $5 billion – more than any other American company ever had at the time. New CEO Lou Gerstner succeeded in turning things around, though at a cost. He fired close to 100,000 people, loosened up the famously stodgy corporate culture, and changed IBM’s marketing strategy. The shake-up worked. Though the intervening years haven’t been without their challenges and profits have been falling, IBM still generated more than $81 billion in revenue in 2015 by making mainframes, providing business services, and producing software.

7. Starbucks

Like several other business on this list, Starbucks struggled during the 2008 financial meltdown. Unlike some companies, though, it didn’t require government intervention to right the ship. But things were so dire in 2008 that former CEO Howard Schultz returned to the company to set things straight. The company had grown too fast, as Business Insider explained, and was stumbling under its own weight. Once he returned to the helm, Schultz quickly set about changing things, inviting people to email him with suggestions for improving the stores, briefly closing all locations for retraining, rethinking the company’s advertising campaign, and getting serious about social media, among other changes. Though the chain did close several hundred under-performing locations in 2009, it emerged from the rough patch stronger than ever.

8. Jack in the Box

In 1993, an E. coli outbreak at dozens of Jack in the Box restaurants set off a major crisis for the fast food chain. After eating contaminated hamburgers, four children died and more than 175 people were hospitalized (some suffered permanent kidney and brain damage). The scandal put expansion plans on hold and led to layoffs. But implementing stringent food safety standards, along with a clever marketing campaign, helped the chain recover. Today, Americans can’t get enough of Jack in the Box’s food, including its “vile and amazing” tacos, of which it sells 554 million every year, according to the Wall Street Journal.

9. Chrysler

The 2008 financial meltdown wasn’t the first time the government stepped in to save a struggling U.S. automaker. In 1979, Chrysler was in bad shape due to the 1970s oil crisis, falling sales, and rising pressure from foreign competitors. The fed stepped in and loaned the company $1.5 billion to help it stay afloat. That money, along with leadership from Lee Iacocca, pulled Chrysler back from the brink. In the ‘80s, it introduced new, inexpensive compact cars as well as minivans, which consumers eagerly snapped up.

10. Lego

Lego has earned high praise for its toys, which encourage creative play for kids, but a little over 10 years ago, the Danish company’s foundation was shaky. It was unwittingly selling some products for less than they cost to manufacture, while new toy sets failed to impress fans young and old. So, the company streamlined operations and set about recruiting designers who loved the product. The new approach worked. New sets proved popular (especially those tied to hit franchises like Harry Potter), and a blockbuster movie also helped the brand. Now, two years after become the world’s largest toy company, Lego is so successful it’s struggling to keep up with demand.

[Editor’s Note: You can see how your loyalty to certain companies, e.g., everyday spending, is affecting your credit by viewing two of your credit scores for free on Credit.com. Your scores are updated every 14 days, and checking your scores will not harm them in any way.]

This article originally appeared on The Cheat Sheet.

Image: plherrera

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.



Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team