Getting deep into business debt is a traumatic and exhausting experience. Profits rapidly falling, sales dropping and the failure to meet loan repayments is always omens of bankruptcy; the greatest horror show of a company. Yet declaring bankruptcy does not necessarily mean the end of a business’s existence. In reality, in certain situations, it may also represent an attempt to establish a positive transition. With a suitable turnaround plan, businesses will get back on their feet and come out better than ever from bankruptcy.
Here are a few companies that bounced back after bankruptcy.
We demand big superhero action movies from Marvel these days even though Marvel was bankrupt 20 years ago. Marvel registered for bankruptcy in the United States Bankruptcy Court on December 27, 1996. The firm was giving up funds hand-over-fist. Even worse, it owed money (unexpectedly, it legally owed Disney its biggest debt, $1.7 million). More than one-third of Marvel’s workers have been marked off. For a corporation that has managed to create such emblematic and recognised characters on the planet, the progress appeared hopeless. With its several comic book elements, the firm did not know what to do.
Marvel struggled to transform its comic book heroes into stars, while rival DC Comics converted popular characters like Batman and Superman into mega franchises. Beginning in the late ’90s, licensing agreements effectively helped bring Superheroes like Spider-Man, X-Men, and Blade to theatres. But Marvel had not made any money yet. So they decided to start a studio, and it worked. The business was purchased by Disney, and now Marvel routinely delivers blockbusters that give rise to profits.
Sneaker manufacturer Converse revealed at the beginning of 2001 that it was planning to shut down three North American manufacturing facilities, which recruited about 1,000 people and to shift operations to Asia as part of a bankruptcy reorganisation. Mr Glenn Rupp, Chairman and CEO, kept insisting that the Converse brand, as well as its profits, were solid, but the firm was too overburdened by debts dating back to its takeover of Apex One in 1995 and subsequent lawsuits.
It also endured a startling downturn in the athletic footwear sector internationally in 1998 and 1999. In July 2003, Nike offered $309 million for the acquisition of Converse. Nike re-launched the company’s brand shoes of preference, and “Chucks” swiftly became a societal trend once more. Consequently, Nike has broadened the Converse brand to include companies other than footwear, much like its other brands. As of 2015, the firm’s annual contribution is around $2 billion.
It is impossible to accept that one of the biggest and most prosperous tech-based retail companies throughout the planet was at one juncture on the verge of a financial meltdown. Although they never formally went into bankruptcy, Apple was on the brink of a financial crisis in 1997. At the last moment, nevertheless, their rival and the greatest contender to date, Microsoft, made an investment of $150 million in the business, allowing Apple to experience one of the greatest re-enterprises in history. Sources say that Microsoft has allowed this investment as a way of saving the face so that regulatory authorities do not suspect that the company has a monopoly on the sector.
4. General Motors
The economic downturn of 2008 managed to bring bankruptcy to a series of major firms and financial entities. Among them was General Motors (GM), one of the largest and greatest impactful firms in American historical memory. Established in1908, the formerly powerful automaker completed its 100th year of anniversary with a liability of more than $30 billion. In June 2009, GM filed bankruptcy in Chapter11, and with the support of government financing and a progressive reorganisation strategy by business bankruptcy professional Jay Alix of Alix Partners, GM made an initial public proposition in 2010. The business was sustainable once more by the end of the year and has only gone to prosper, with a total profit of $1.1 billion in July 2015.
5. Best Buy
Best Buy is presently the biggest and most recognisable brick-and-mortar electronic equipment store throughout the globe. Interestingly, in2010, revenues and profits had dropped sharply, and it seemed that the retail titan might have had to shut down straight away.
The controversy of the then CEO, in 2012, seemed to make the issue worse for the provider of electronic products. With the new and present CEO Hubert Joly, things are taking a twist for good with the electronic retail powerhouse. Joly attempted to tidy up once disorganized retail outlets, close locations that were needless and cost store profits, bring in more unique goods and enhance service quality. Perhaps most significantly, however, he reshaped the online and in-store encounter of the consumers, making it much easier for them to analyse and buy it online or in the retail outlet.
6. Ashley Stewart
Plus-size women’s clothing company Ashley Stewart ended up getting as near to the end of the step as a company can get. In March 2014, the firm registered for foreclosure for the second time in three years. Opportunities were looking bleak; local retailers were closing down left and right, and stakeholders were not keen to be affiliated with what seemed to be a further deteriorating retail company. But James Rhee, the executive chairman and CEO, had an ambition of reinventing Ashley Stewart as an e-commerce and social media platform-driven business.
The brand’s redeeming quality came as a result of a purchasing decision by the private equity group Clearlake Capital, which acquired Ashley Stewart only one month after the bankruptcy was filed. The business has begun to recover under Rhee’s guidance and is presently preparing to re-launch its digital application, develop a website and produce fresh content for its YouTube channel, Ashley TV, as per a March 2015 Plus Model Magazine story.
7. Betsey Johnson
Although her clothing brand is flourishing today, only a few years ago, designer Betsey Johnson fell into difficult times. Profits dropped dramatically from their $150 million maximum in the mid-2000s, and in April 2012, Betsey Johnson LLC submitted for Chapter 11 bankruptcy, even after Steve Madden bought the business’s remaining debt and licencing contracts in 2010.
This culminated in 350 layoffs and the closure of almost all Betsey Johnson retail outlets, as per The New York Times. But that did not slow down Johnson; the Times story claimed that by the end of 2012, she already had commenced rebuilding her business by launching a new, lower-priced line of dresses that still symbolised her iconic, whimsical theme.
The Eastman Kodak Company has been a powerhouse in the pictorial film sector for more than a century. But, like numerous older firms, Kodak has become a casualty of new trends and advancements. As digital photography penetrated the public consciousness in the late 1990s and early 2000s, the firm’s film sales started to collapse. Kodak wrestled to maintain up with the digital transformation and subsequently registered for Chapter 11 bankruptcy in January 2012.
After approximately two years of a company reorganisation, a new Kodak surfaced in September 2013 as a “technology company focused on imaging for business,” as per the firm’s official site. Although its quarterly earnings have dropped since Democrat & Chronicle confirmed a peak of $19 million for the firm in Q32014, Kodak has seemed to have suffered the hardest of its financial struggles.