Many of the world-renowned companies today have a struggling past which most of us are unaware of. Here is the backstory of 9 companies who you din’t know battled bankruptcy in the past-
It’s well known that Steve Jobs and Steve Wozniak founded the trillion dollar company Apple, in a Silicon Valley garage in 1976. But it was Microsoft that helped save the company in 1997 when it was on the brink of bankruptcy. Steve Jobs revealed he had secured a $150 million investment from Microsoft and also got an assurance from Bill Gates that Microsoft would support its Office products for the Mac for five years. “If we want to move forward and see Apple healthy and prospering again, we have to let go of this notion that for Apple to win, Microsoft has to lose,” Jobs said, and he was evidently right. Now, Apple is the most valuable company in the world, but twenty years ago, it was losing $1 billion a year.
Today Starbucks, the multinational chain of coffeehouses, is one of the most respected coffee brands and is present in 43 countries across the globe. While its quality is unquestionable, its price has always been higher than those offered by the domestic coffee houses in various countries. This was one of the reasons why the company took a hit during the year of 2008, as customers opted for cheaper options for their everyday coffee. Starbucks was forced to shut 600 shops that were not making profits. In 2009, it closed another 300 stores and laid off 6,700 employees. Over the course of time, Starbucks implemented over a 100 ideas. Through this initiative, the coffee retailer built a robust fan base. Today Starbucks is worth over $30 billion. This coffeehouse company is a great example of a brand turning around its business by returning to its roots and reconnecting directly with its customers.
When Nintendo released games like Donkey Kong, Super Mario (the 1980s), Game Boy, Nintendo 64 (the ’90s) and all time favourite Wii (2006), it gained huge popularity worldwide. But all it took was one bad release in 2012 where Nintendo suffered Wii U’s release. “It faced poor marketing, inconsistent title release and lack of third-party support”, said GameHubs at the time. But when 2017’s Nintendo Switch was released it gained over $1.6 billion in profits.
When Jorgen Vig Knudstorp came in as Lego CEO in 2004, the company was struggling to give consumers what they wanted and weren’t able to effectively manage costs. It was at this time the company was on the brink of bankruptcy. The only reason Lego survived during this difficult time was due to the success of the Bionicle and “Star Wars” series. The first “Star Wars” Lego kids was launched in 1999. The company streamlined operations, recruited passionate designers, and created partnerships with hit franchises like Harry Potter. The new toy sets became popular, and a blockbuster movie also helped the brand. Now, two years after becoming the world’s largest toy company, Lego is so successful it’s struggling to keep up with demand.
In the early 1990s, IBM had hit a new low and was struggling. It’s stock prices had dropped from $43 in 1987 to $13 in the 1990s. Bill Gates expected that IBM would fold in seven years. In the meantime, IBM’s board of directors were hunting for a suitable CEO who would change the company’s fortunes. A good lot of CEOs flatly refused to consider the opportunity. When Lou Gerstner, a man with no advanced experience with technology, was appointed people laughed. But it was due to him IBM and its sales grew by 41% in 1994 and 60% by 1995. The company was finally on the path of recovery.
In the 1970s, Converse bought out one of its biggest competitors at the time, PF Flyers, from B.F. Goodrich. Converse lost their monopoly from the 1970s onward, with new competitors, including Puma, Adidas and Nike. A decade later, Reebok, who introduced new designs and technology to the sports market, Converse was no longer the official shoe of the National Basketball Association(NBA). Converse filed for bankruptcy on January 22, 2001. In April 2001, Footwear Acquisitions, purchased the brand from bankruptcy and added industry partners like Jack Boys and Jim Stroesser. In 2002, the flailing company reported just $205 million in revenue. Now, Nike has transformed the brand into a $1.4 billion business.
Today, Marvel, the entertainment company, is a world renowned franchise with the biggest fan following ever but 20 years ago, Marvel was bankrupt. The company didn’t know what to do with its many comic book properties. While rival DC Comics turned iconic characters like Batman and Superman into blockbuster franchises, Marvel failed to turn its superheroes into stars. Starting in the late ’90s, licensing deals successfully brought Marvel’s characters, like Spider-Man, the X-Men, and Blade, to theatres. But Marvel still wasn’t making money. So, it started a studio and luckily, it worked. The company was acquired by Disney and now Marvel regularly creates movies that rake in profits. As of now, Marvel’s net worth is $13 billion. Marvel Entertainment has produced some of the best productions such as X-men, Spiderman: The Animated Series and The Avengers.
Theme park operator and amusement company Six Flags, today, has 26 theme and water parks throughout North America, home to some of the world’s biggest and fastest roller coasters. In 2009, however, the company declared bankruptcy after racking up more than $2.7 billion in debt which it could not pay back. Six Flags reorganized and emerged from bankruptcy in 2010. Today’s Six Flags has the net worth of $1.5 billion.
Walt Disney is one of the most well known brands in the world. Walt Disney a filmmaker, cartoonist, and creative genius launched his first company in 1920. He even had a deal with a New York distribution company to get his films into theatres. But in 1922 things went terribly wrong. The distributor began to cheat Disney out of his money causing the new filmmaker to fall short on the funding needed to cover his finances. Faced with mounting debts and no money to pay his bills, Walt Disney filed bankruptcy in 1923. The same year he file bankruptcy, Walt Disney formed a new film company using a loan from his parents and brother. His debts forgiven and his new company properly financed, in 1928 Disney created his most iconic character – Mickey Mouse. Nearly ten years after that he released Snow White and the Seven Dwarfs, and the rest is history. Today, The Walt Disney Company is worth an estimated $130 billion.
These world recognized companies, industries and franchises make us realize that everything, even something huge as bankruptcy, gives us an opportunity to create something bigger and better.