Brands That Disappear… and Reappear

Everything dies, baby, that’s a fact                                                                 But maybe everything that dies someday comes back                                                                                             “Atlantic City” by Bruce Springsteen

That snippet from “Atlantic City” was in my head when I read an on-line article titled “10 Brands that Will Disappear in 2012” by 24/7 Wall Street.  The list of brands includes Sears, Sony Pictures, American Apparel, Nokia, Saab, A&W All-American Foods Restaurants, Soap Opera Digest, Sony Ericsson, MySpace and Kellogg’s Corn Pops.  Frankly, I was surprised some of these brands are still around, so I am not surprised they’re on the list of those that will disappear.

24/7 Wall Street publishes a “10 Brands hat Will Disappear” list every year, and the web site takes credit for its predictions that come true and acknowledges when it was mistaken.  Of course, in some of its misses, it is only a matter of time before these companies succumb.  As I once explained to a colleague who told me a senior executive was leaving the company, “I heard that rumor when I joined the company five years ago.  I know he is leaving, the question is when.”

The other thing to remember is that just because a company dies, doesn’t mean the brand dies as well. And sometimes brands do come back.  One example is Narragansett Beer, the Rhode Island-based brewer that closed in1981 and was brought back in 2005 by a group of investors.

My sister sent me an article from The Street last year about a private equity firm called Racebrook that was auctioning off 150 classic American brand names it had acquired.  Many of these were (and some still are) household names such as Handi-Wrap, Victrola, American Brands, Meister Brau, Braniff International and Shearson (as in Shearson Lehman).  The firm found buyers for about one-third of the brands it auctioned, according to the article.

So why would a company invest in a brand that has disappeared?   Brands are in the mind of the consumer and sometimes, long after the company disappears, we still have fond memories of the brand.  I call these “nostalgia brands”.  They bring us back to a time in our lives when things seemed simple, mainly because we tend to remember good times and block bad memories from our thoughts.  For example, my mother had many happy memories of growing up, even though she grew up during the Great Depression and World War II, a time many of us think of as full of hardship.

Key considerations for making an investment in a nostalgia brand include:

  • Do people remember the name?
  • Is the name still viewed positively?
  • Is there a large enough market for the brand’s products or services?
  • Can the brand connect with today’s buyers?
  • What type of investment is required to make the brand viable again?

A large part of the decision involves examining why the brand disappeared in the first place.  If the brand disappeared because of fiscal mismanagement or poor strategic decisions, these can probably be overcome.  If the issues involved product or service quality, you are better served starting with a new brand name.  It is harder to overcome negative perceptions than to start with a clean slate and build a positive reputation.   So I see a brand like Shearson as a non-starter because its notoriety in the financial meltdown has made it a name few would trust with their money.  Victrola might have issues because it is perceived as old (I think of it as my grandparents’ generation) and became obsolete technology.  Trying to convince people they should buy a product with that nameplate in the 21st century might be a stretch.

Successfully investing in a nostalgia brand takes a lot of homework.  But reviving a brand that has strong equity, a well-defined market and a great story to tell can be a less expensive, easier road to market than creating a new brand.

 

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