10 Memorable Businesses That Went Bust
The five-and-dime pioneer, founded in 1879 back when you could buy something useful for your household with only loose change, was one of the first American retailers to let the customer actually handle and select merchandise on their own without the assistance of a sales clerk. Beginning with an unsuccessful store in Utica, NY, Woolworth’s grew into an empire. It eventually became one of the world’s largest chain stores throughout practically the entire 20th century.
The company’s course changed, however, in the ’80s, when it faced fierce competition from other popular department stores and shopping malls. In response, the chain decided to invest in specialty shops including Kinney Shoes, Champs Sports and Foot Locker. This expansion led to the company’s demise. As the ’90s came to a close, all the Woolworth’s locations had shut down, and the company solely became Foot Locker.
Pan American World Airways, or Pan Am, was a pioneer in international travel. With its inception in 1927, it first served as a mail carrier between Key West and Cuba and then began to deliver passengers as well. Expansion into other foreign markets came quickly and the airline became an emblem of worldwide flight. It never captured the domestic market here, and that would lead to problems later in its history.
The leader in luxury travel abroad, Pan Am was also an innovator, summoning in the jet age as the first airliner to add the 707 and the widebody 747 to its fleet. Profits then soured in the ’70s at the dawn of that decade’s oil crisis. As the price of fuel increased, air travel declined, and Pan Am was left with an army of underperforming gas guzzlers. Seeing this as a crisis, they desperately tried to break into the domestic market, but competing airlines — including American, United, and the also now defunct Eastern — elbowed them out.
The final nail in Pan Am’s coffin came during the first Gulf War when oil prices spiked all over again. Though the airline itself is gone, its iconic “blue meatball” logo endures, often seen on luxury travel bags. A classy item no doubt, and one Mandatory editors might consider as gifts to their contributing writers around the December holidays.
Though its original feature films were of course black and white, RKO glittered as one of the Big Five studios during Hollywood’s Golden Age. The release of “The Jazz Singer,” the first talking feature, ushered in a new wave of interest in filmmaking and RKO emerged shortly thereafter in 1928. Though always operating in the shadows of powerhouses like Warner Bros. and MGM, RKO specialized in artistic features, first critically acclaimed musicals, then branching out into other successful genres.
The studio launched the career of Katharine Hepburn, gave us “Citizen Kane” and “King Kong,” and Fred Astaire and Ginger Rogers’ most celebrated films. RKO even had a hand in some of Disney’s most beloved early animated classics. But the studio system, a reckoning force in the first several decades of film’s glory days, began its decline in the middle of the 20th century as television was gaining steam. When germaphobic maverick Howard Hughes took the studio’s reins, its horse race was over less than a decade later. Though traces of the enterprise would go on to survive well into the ’80s, the studio itself shut its doors at the end of the ’50s, leaving behind a library and legacy that keeps its name and beeping globe-mounted radio tower logo alive today.
You may not have wanted to frame them, but the instantaneous output of a Polaroid camera was much more than a novelty, and the product itself was wildly popular and lucrative for its company. Its founder was a young innovator who left Harvard temporarily to start the Polaroid Corporation. His creations based on polarization and not simply photography, sunglasses, 3D movies and military equipment, were also in its portfolio.
The launch of Polavision in 1977, an instant home movie camera, signaled the beginning of Polaroid’s unstoppable downward trajectory. The company was experimenting with digital film all the way back in the ’60s, but its misjudgment that consumers would always want a hard copy of the photos they took prevented it from taking that market as seriously as it needed to in retrospect. Polaroid declared bankruptcy in 2001, and rewarded its executives handsomely. Its stockholders and current and retired employees, however, were left with nothing of value, much like most surviving Polaroid photographs themselves.
Founded in 1971, the original Borders business model was to sell inventory specifically tailored to the communities in which they operated. As the enterprise became successful over the decades, it was purchased by K-Mart — along with Waldenbooks — which had been looking to get into the book market. But the acquisition was problematic and Borders was eventually spun off into its own company, Borders Group, taking Waldenbooks with it.
Stores became ubiquitous, dotting the commercial landscape across the country and around the world. Those who believe the emergence of Amazon.com ultimately took Borders down probably don’t know the half of it. Borders actually inked a deal with Amazon to run its website, opening the door for the online megasite to cannibalize their customer base. That, and the fact that Borders was way late to the e-reader game — releasing its poorly-named Kobo years after the Kindle and Nook had already caught fire — also helped write the last chapter of the brand’s history.
If you were a kid in the late ’70s and early ’80s, it is likely that instead of doing your homework, you were sitting on the floor in front of the television playing a video game on your Atari console. Its first hit, Pong, consisted of two opposing vertical dashes and a pixel that volleyed between them. As this game system’s popularity grew, so did its titles in a variety of genres, all with pretty unimpressive graphics. But that went mostly unnoticed as the video arcade was marvelously transported into the household.
The high drama behind the scenes between Atari’s creators, stewards and owners is the stuff of a Hollywood biopic — probably starring Christian Bale — but this is not what led to Atari’s demise. The video game crash of 1983, when interest in the systems plummeted, coincided with the company’s release of two poorly received, very expensive titles — Pac-Man and E.T. — and it was game over. Just a few years later, however, a Japanese brand called Nintendo rose from Atari’s ashes — helped mightily by two feisty, animated Italian brothers and their battles among batches of jumpy mushrooms.
Its underperformance on the road, shoddy craftsmanship, high consumer cost and stainless-steel body that left fingerprints and made painting problematic might otherwise be what history remembers of the DeLorean DMC-12. But it looks so cool with its innovative design culminating in its signature gull-winged doors. And when it accidentally took Marty McFly time traveling, leading to his quest to go “Back to the Future,” the car became a worldwide legend.
Despite heavy investment in the brand, only around 9,000 were sold during the DeLorean Motor Company’s short lifespan — purchased mostly by hobbyists, not serious car owners. That consumer base proved unsustainable. As the brand was suffering financial turmoil, founder John DeLorean himself was caught on camera participating in drug trafficking, presumably to raise capital for his dying company, which in turn flatlined. However, the mystique of DeLorean — boosted by a beloved Hollywood trilogy and an outspoken corps of loyalist car owners and fans — still survives today. It’s even prompting an early 2016 announcement that an effort to jump start the company and bring new DeLorean models back onto the road — sadly without the flux capacitor option — is underway.
Compaq, born in the ’80s, was a major player in the PC computer business. And though it helped thrust home computing into a limitless future, the company itself did not survive much beyond the start of the 21st century. Their very first product, the Compaq Portable, looks like what a nomadic caveman might have tweeted on, but at the time was a revolutionary product and gave the company a seat at the personal computing table. Speed-busting desktop models followed and their market share rose higher and higher.
But Compaq also saw sharp competition nipping at its heels, and in 2001 lost the number one ranking as a PC manufacturer to the lower priced Dell computers. That era’s dot.com bust also severely affected the company, which saw an accumulation of close to $2 billion in debt. A merger with HP, led by mean girl CEO and future failed political candidate Carly Fiorina, looked like salvation for Compaq, but instead the company’s staff and branding saw itself whittled down to nothing within a decade. As of 2013, its name was discontinued from any future HP products.
Once upon a time, households across the world possessed a scrappy little device called the VCR. A VCR swallowed video cassettes or tapes one at a time and played a movie or some form of visual entertainment through its mechanisms. Therefore, a store called Blockbuster Video likely opened in your hometown providing endless options for video rentals with the monopolizing efficiency that ran your competing mom and pop video store straight out of business.
No one ever uttered the phrase “Blockbuster and chill” we reckon, but for a few decades, beginning in 1985, that’s just what we did. Assisted by friendly khaki and blue clad clerks, Blockbuster Video was the Studio 54 of weekend home entertainment browsing. They transitioned finely enough into the DVD era, but that innovation brought a new form of competition, and with the one-two punch of upstarts Netfilx and Redbox, Blockbuster was knocked off its pedestal. It tried mightily to adapt to the new, brick- and mortar-less landscape, but it was too late. The name Blockbuster still appears atop a handful of Dish Network-owned franchises, but the company that streamlined the video rental industry has rewound itself into oblivion.
Its sock puppet mascot, a fast-talking dog reporter complete with microphone, brought Pets.com wide popularity during the dot.com boom. In the company’s short lifespan — 14 years in dog years — he appeared on “Good Morning America,” “Live with Regis and Kathie Lee,” a Super Bowl ad and was even immortalized as a balloon in the Macy’s Thanksgiving Day Parade. Pets.com, however, did not share much permanence.
Adopting a business model devoid of any market research whatsoever, items were sold below cost and racked up high internal shipping charges, delivering heavy bags of food, litter and other essentials to customer’s homes. This did not win the enterprise any “Best in Show” ribbons. Instead, it led to its $300 million in venture capital to disappear quicker than dishfuls of Alpo after the Iditarod. The leadership team who saw their company go from IPO to bankruptcy in just 298 days undoubtedly screwed the pooch.