The Top 10 Fastest-Falling Mega-Brands
By Anthony Shields Oct 23, 2012 9:55 am
How the mighty fall! According to Interbrand, these former titans of brand value have tumbled most dramatically in the past year.
MINYANVILLE ORIGINAL It takes a lot of effort to build a strong brand, and even more to maintain it. One bad marketing blunder or faulty product can tarnish a company’s reputation forever, sending consumers straight to its rivals. Even Apple (NASDAQ:AAPL) (AAPL), with its status as the hippest company on Earth, is likely running its PR people ragged trying to curb negative consumer perception in the face of company lawsuits, the disappointing iPhone 5 release, and Samsung's (PINK:SSNLF) aggressive ads. Interbrand, one of the nation’s experts on global brands, recently compiled data on the top companies that are failing to maintain consumer appeal. The following are the top ten brand names that are losing their fanbases -- and maybe big bucks because of it. The consultancy measured brand value as a combination of financial performance and conceptual brand value. (See also: The Top 10 Fastest-Rising Mega-Brands)
The past four years have not been kind to Dell (NASDAQ:DELL) (DELL). The company is still one of the world’s largest computer manufacturers, but its newest strategy to move away from PCs and into the mobile market is raising eyebrows. Dell has been struggling to create a competitive smartphone, but its first model, the Venue, failed to attract consumers, leading to the Venue's discontinuation in March. Interbrand values the Dell brand at $7.6 billion, citing a 9% decrease since 2011. This is the lowest for Dell in 11 years, and its stock price reflects the fall. Right now, Dell is trading at $9.55 per share and has lost 34.72% in value since the beginning of the year. Although it is not faring as poorly as competitor Hewlett-Packard (NYSE:HPQ), Dell is going to have to think fast if it wants to remain a household name.
Gone are the days of Thomson Reuters' (NYSE:TRI) dominance of the financial terminal market. The company’s major rival, Bloomberg, has finally caught up in market share, becoming the most popular terminal on Wall Street. Reuters still holds one-third of the market, but the company’s failure to prevent the success of Bloomberg and others has led the Thomson family (who own a majority stake in the company) to remove Tom Glocer as CEO. This may have been an overreaction as the company still leads the legal research database category, and is a resource for tax professionals and accountants. But Interbrand noted an 11% decrease in the company’s brand this year, leaving its brand valuation at $8.4 billion. On the positive side, Thomson Reuters stock is up 6.52% for the year to $28.41 per share and seems to be on an upswing.
The brand valuation of the worldwide automotive industry has finally begun to recover from recession lows, but Honda (NYSE:HMC) can't join the celebration. Interbrand rates Honda’s brand valuation at $17.3 billion, its lowest level since 2006, and $13 billion behind rival Toyota Motor Corps’ (NYSE:TM) valuation. The fall was largely caused by things outside the company’s control, such as Japan’s 2011 earthquake, which hurt manufacturing, and floods in Thailand, which stymied suppliers. Still, the company’s multiple major safety recalls may have been the biggest hit to consumer confidence. Right now, the company’s stock is down for the year by 2% and is trading at $29.95 per share. Although the loss is light, Honda hasn't had a month out of the red since April, demonstrating a need for change.
When your name is as woefully misleading as MTV, consumers are naturally going to have gripes with you. MTV’s experiments in low cost content and movements away from its musical roots have led to criticism that the network has lost its edge. This wouldn’t be so bad, but a few of MTV’s major shows have been hitting turbulence, including the controversial Jersey Shore, which began its final season October 4. Adding to the tension is the low ratings of the MTV Movie Awards, which fell 29% from the previous year. This year, Interbrand noted a 12% decline in MTV’s brand value to $5.6 billion. The loss might be major, but it isn’t affecting the executives at Viacom (Nasdaq:VIA), MTV’s parent company, much; its stock price this year is up 23.96% to $56.28 per share. Still, it might want to encourage MTV's directors to resolve the network's identity crisis.
After five years of consecutive declines, Citi’s (NYSE:C) (C) brand value is now $7.6 billion, less than one-third of its all-time high of $23.4 billion in mid 2007. Since that time, Citi has been fielding multiple lawsuits concerning its role in the notorious US subprime mortgage crisis. Consumers have also been angered by Citi's acceptance of a $45 billion government bailout in 2008 and a failed Federal Reserve stress test, wherein the company was evaluated based on its ability to survive a stock or housing market crash. Citi tried to revitalize its brand, becoming an Olympic sponsor and airing commercials that highlighted the financial firm's major financial innovations over history, but analysts see the company’s failure as a problem with fundamentals, not marketing. Citi’s stock price has turned upward since the Olympics and is actually up 31.51% for the year; the price is now hovering around $34.60 per share.
New CEO Marisa Mayer has my vote; she may be able to turn the struggling search engine around, but Yahoo (NASDAQ:YHOO) still has many challenges ahead of it. During its search to find a suitable CEO, the company has increasingly lost its share of display ad marketing to Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB). eMarketer predicts that by this year's end Yahoo will only have 9.3% of the market, putting it far behind its rivals. Mayer has made some smart financial moves lately, such as selling the company's stake in Alibaba (HKG:1688)for a profit, but the jury is still out on the efficacy of her plan to turn Yahoo into a smartphone and tablet maker. Interbrand states that Yahoo!’s brand value has fallen by 13% to $3.9 billion this year. The stock price sits at 1.67% at the moment, but the company has made massive gains since appointing Mayer and could end the year in the green if its performance continues.
Despite launching celebrity-hosted tours worldwide and opening a boutique hotel in St. Tropez, Moët & Chandon’s brand value has plummeted by more than $500 million in the past year. In order to restore consumer awareness, the company has signed a sponsorship contract with America’s Cup, a world-renowned sailing race. However, Interbrand’s Josh Feldmeth believes that Moët & Chandon’s loss has less to do with the brand getting weaker, and more to do with economic growth in countries that do not associate champagne with celebration. The brand is still the most popular in the US, where it is experiencing sales growth, but worldwide Moët & Chandon’s brand valuation has fallen by 13% to $3.8 billion. Moët’s parent company, LVMH Moët Hennessy Louis Vuitton (PINK:LVMUY), has actually been experiencing growth this year, gaining 8.59% to date to $118.60 per share.
Things are looking as bleak as ever for Nokia (NYSE:NOK) (NOK). Over the past year, the company’s stock price has been cut in half, it has increasingly lost market share to Samsung, its prospective rivals seem to be growing by the day, and the company has been forced to cut 10,000 jobs just to save cash. Nokia’s last hope seemed to be the success of its Lumia series of Windows 8 (NASDAQ:MSFT) (MSFT) phones, but the phone's September 5 announcement left consumers unimpressed and caused its stock to tank, indicating that the phone might not sell well upon release. Interbrand claims that Nokia’s brand has fallen by 16% over the past year to a $21 billion valuation. This is reflected in its current stock price, which has fallen by a massive 46.06% to date to land at a mere $2.60 per share.
Goldman Sachs (NYSE:GS) (GS) earned a lot of public ire in 2008 over its role in the sale of complex collateralized debt obligations and the Greek debt crisis. But this March, it was back in the news in a very bad way. After years of being fed up with the banking firm, executive director Greg Smith chose to make his sudden resignation very public with an inflammatory letter to the New York Times. Smith’s letter accused Sachs of demonstrating a lack of any respect for its clients, which he alleges were commonly referred to as “muppets" within the company. The aftermath of Smith's letter crippled the company's revenue in the early months of 2012, forcing the company to cut pay by 14% and reduce jobs. Interbrand notes that the Goldman Sachs brand valuation fell by 16% this year to $7.6 billion. Still, Goldman Sachs is finding favor with investors, as its stock is up for the year by 32.28% and trading at $119.71.
It seems like only three years ago that Research In Motion’s (NASDAQ:RIMM) (RIMM) BlackBerry had a loyal fanbase of “CrackBerry” users and a commanding share of the smartphone market, but consumers were quick to kick the habit once the iPhone and Android came around. The past year has been especially brutal for BlackBerry. The BlackBerry outage in late 2011 and disastrous sales of its PlayBook tablet only added to investors’ worries that the company would fail to compete. Now the BlackBerry only holds a 9.5% share of the smartphone market, which is threatened even by Microsoft’s Windows 8 phone. Interbrand states that BlackBerry has lost 39% of its brand value, which now stands at $3.9 billion. To date, its stock price has fallen 46.21% this year to $7.80 per share, contributing to a nearly 90% loss over the past three years.
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