Should You Buy These 5 Losing Brands?
Sep 30th 2013 6:20PM
Updated Sep 30th 2013 6:22PM
We should have seen it coming. Last year Apple was the brand that made the biggest gains in value from the year before, rising 129% to settle into the No. 2 spot behind Coca-Cola.
Now Apple's upended the, er, apple cart: It ended Coke's 13-year reign atop Interbrand's 100 most valuable brands, moving up another 28% this year with a brand value in excess of $98.3 billion. Coke, only inching 2% higher to a brand value of $79.2 billion, was unable to stave off the onslaught and slid down to third place -- behind Google!
Yet not every brand was a winner. In fact, there were some pretty big losers. Of the top 100 brands, 14 actually fell in value, and four saw no change. While Warren Buffett's Heinz lost 1% of its value, as did Hewlett-Packard, six of them fell by double-digit percentages.
|Brand||2013 Rank||2012 Rank||Brand Value Change|
What that list doesn't show are the brands that fell even harder over the course of the year -- falling so far they fell off the list completely. BlackBerry was the worst performer last year, falling all the way to 93, and, considering its current state hinges on its sale to Prem Watsa taking the handset maker private and staving off a worse fate, it's not surprising it no longer made the list.
Hanging up on growth
Nokia isn't in much better shape, with its handset and services division having recently been sold off to Microsoft. This is the second year running it's been a bottom five contender, which just proves the value inherent in Apple and Samsung, which inched up the list from ninth place to eighth with a 20% increase in brand value.
Go big or go home
Investment house Morgan Stanley is being weighed down by its decision to go small. It shrunk its trading and wealth management businesses, and now, despite better second-quarter results and an announced buyback of half a billion dollars worth of stock, it's underperforming the financial services index of stocks.
Video-game maker Nintendo is stuck in a fast-changing world that it has refused to keep up with. Interbrand notes that it doggedly sticks with its game console business while the world moves on to different paradigms, from mobile and free-to-play to state-of-the-art system upgrades. It's venturing timidly into some of these areas, but thus far its moves haven't been bold enough.
Reality killed the video star
It's easy to poke fun at MTV, which long ago abandoned any resemblance to its music video origins, preferring instead to focus on dysfunctional individuals in reality-TV land. Interbrand says it's a testament to its focus on the interests of its audience; I say it's symptomatic of what's wrong with television, and explains why its value continues to ebb away.
Death's calling card
Beauty queen Avon hasn't aged gracefully, and a torturous 2012 led the cosmetics company to a shake-up still in play now. But with better, hipper rivals like Ulta gaining more market attention, Avon remains your mom's makeup company, and hasn't shown a propensity for breaking out from that mold.
Dell, like BlackBerry and Nokia, is hastening its exit from the public markets, preparing for the time its founder takes it private again. The changing computer landscape left the PC maker scrambling for focus, and, having hit upon the enterprise business model, it has yet to discover a winning equation.
Last year I suspected BlackBerry and Yahoo! were the two brands most in danger of disappearing from the list and from the market. Certainly both are no longer top brands these days, and the former may not even survive as a smartphone option. This time around, Nokia and Dell will soon be gone, though they may survive as brands. That leaves me thinking it won't be long for Avon to hear death knocking on her door -- I suspect it will be first to go off next year's list.
The fact that their brands are losing market share and value doesn't mean there's not a compelling case to be made for them, though it becomes a higher hurdle to get over.
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The article Should You Buy These 5 Losing Brands? originally appeared on Fool.com.Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Apple, Coca-Cola, Google, Ulta Salon, Cosmetics & Fragrance, and Yahoo!. The Motley Fool owns shares of Apple, Google, Microsoft, and Ulta Salon, Cosmetics & Fragrance. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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