The Lazarus Brands: 7 Remarkable Corporate Comebacks
It‘s an unfortunate fact of business that even the mightiest brands can fall. Shifting consumer tastes, disruptive new competitors, poor leadership decisions – there are many potential pitfalls that can drag an iconic company to the brink of death. According to the U.S. Bureau of Labor Statistics, only about 36% of companies founded in 2000 were still around just 10 years later. And the carnage has only accelerated since the turn of the millennium:
| Year | Major US Retailers Closed | Percent Decline |
|---|---|---|
| 2015 | 5,077 | 1.9% |
| 2016 | 4,778 | 1.8% |
| 2017 | 8,139 | 2.8% |
| 2018 | 7,191 | 2.4% |
| 2019 | 10,037 | 3.3% |
| 2020 | 12,200 | 2.4% |
Source: CoStar Group
And yet, every so often, we see a Lazarus brand – a company that manages to rise from the ashes and mount an astonishing corporate comeback against the odds. Just when you‘re ready to count them out, they manage to pull together the right leadership, vision, and strategy to eke out an unlikely victory and reclaim their former glory.
As a Linux and proxy server expert, I know firsthand how open-source technologies and a strong online presence can help drive these turnarounds in a digital-first world. According to eMarketer, global e-commerce sales are projected to hit nearly $5 trillion in 2021, underlining the urgent imperative for struggling brands to embrace digital transformation. And yet, research from McKinsey shows that 70-80% of these digital initiatives fail to meet their business objectives.
So what separates the corporate comeback kids from the permanently vanquished? Let‘s examine seven brands that went from the brink of death to the top of the world and see what lessons we can glean:
1. Apple
It‘s hard to believe today, but in 1997 the world‘s most valuable brand was on the ropes. Apple had been losing over $1 billion per year, and pundits were predicting the demise of the struggling computer maker. That‘s when prodigal CEO Steve Jobs returned to the company he co-founded and launched its now-famous "Think Different" ad campaign featuring inspirational misfits and rebels. More importantly, Jobs refocused Apple on groundbreaking new products like the colorful iMac computer, the revolutionary iPod music player, and eventually the iPhone – the device that would change everything.
By maintaining Apple‘s core identity and design prowess while boldly innovating in new areas, Jobs orchestrated arguably the greatest corporate turnaround of all time. Twenty years after nearly going bankrupt, Apple became the world‘s first trillion dollar company. The lesson is clear – even when things look bleakest, an intense customer focus married to game-changing innovation can bring any brand back to the top.
2. Best Buy
In 2012, the future looked bleak for this brick-and-mortar electronics chain. Sales were sliding as customers increasingly bought their gadgets online from rivals like Amazon, depressing Best Buy‘s margins and putting the company in a $1.7 billion hole. Under new CEO Hubert Joly, Best Buy fought fire with fire by ramping up its e-commerce business. At the same time, the retailer gave shoppers reason to visit its physical stores with its Geek Squad installation and repair services along with a price-match guarantee.
By leveraging its nationwide footprint of stores, expert sales staff, and tech support prowess, Best Buy was able to provide a high-touch retail experience (complete with in-home consultation) that pure online players couldn‘t match. The company also formed a key partnership with Apple to feature mini-stores for Apple products within Best Buy locations. The results speak for themselves: Best Buy has seen its stock price soar over 300% since 2012 as it remains the last national electronics chain standing.
3. Polaroid
The Polaroid instant camera is an icon of American culture, putting the magic of photography in people‘s hands with the press of a button. But the company that Edwin Land built found itself disrupted by the digital revolution of the late 1990s and early 2000s, filing for bankruptcy protection in 2001 and again in 2008. Under the ownership of Polish investor Oskar Smołokowski since 2017, Polaroid has found new life by marrying its retro-cool instant film cameras with digital technology.
One area where Polaroid has innovated in the smartphone age is instant photoprinters. Its Polaroid Lab product lets you easily print snapshots from your phone camera onto genuine Polaroid instant film. Polaroid has also launched a line of playful, youth-focused digital instant hybrid cameras like the Snap Touch and Pop that combine old-school film output with modern features like touchscreens, 1080p video recording, and Bluetooth connectivity. By staying true to its legacy while experimenting with products for a new generation, Polaroid has begun to recapture its magic.
4. Converse
It‘s hard to imagine a more iconic American sneaker than the Converse Chuck Taylor All-Star. First introduced in 1917, the classic canvas basketball shoe with the star-centered ankle patch gained popularity over the decades with everyone from athletes to artists and musicians. But by the 1990s, Converse was losing ground to more modern sneaker designs from rivals Nike and Adidas. After years of eroding sales, the company was forced to file for bankruptcy in 2001.
Converse found an unlikely savior in former foe Nike, which scooped up the brand for a bargain $305 million in 2003. Nike gave Converse a much-needed capital infusion while granting it creative autonomy. Central to the turnaround was a re-focus on the youth market by sponsoring up-and-coming rock bands, outsider artists and cultural influencers. New styles, materials, and colors were introduced to supplement the classic All-Star while high-profile collaborations with designers like John Varvatos kept the brand fresh and relevant. Just 16 years after bankruptcy, Converse is once again a thriving business with over $2 billion in annual revenue.
5. The Lego Group
This Danish toy company has been sparking children‘s imaginations with its colorful plastic bricks since 1949. But by 2003, Lego was $800 million in debt and teetering on bankruptcy, done in by overextended product lines and diminishing interest from kids. Brought in to rescue the company, new CEO Jørgen Vig Knudstorp made painful cuts, slashing the number of Lego pieces produced from 12,900 to 7,000. Just as critically, he re-focused product development on Lego‘s core mission: creative building sets for children.
The changes worked. Within two years Lego was profitable again and on its way to becoming the world‘s largest toy company. Licensing partnerships with popular movie franchises like Star Wars and Harry Potter kept Lego growing through the 2000s and beyond. Expansions like the Lego video games and feature films have made the brand a transmedia powerhouse. In 2015, Lego was named the world‘s most powerful brand by Brand Finance, overtaking Ferrari.
6. Nintendo
At the dawn of the gaming industry in the early 1980s, Nintendo was the undisputed king with its Nintendo Entertainment System (NES) console and classic franchises like Super Mario Bros. and The Legend of Zelda. But by the mid-2000s, the Japanese gaming pioneer had lost significant market share to powerful new rivals Sony and Microsoft. With the GameCube console struggling against the PlayStation and Xbox, many wrote Nintendo off as a relic of the past.
Nintendo‘s comeback began with the launch of the DS handheld system in 2004, which introduced a quirky dual-screen format and casual touch-based games. This was followed up by the Wii console in 2006, which used motion controls to create a more intuitive gaming experience targeted at families and non-traditional gamers. By zigging where its competitors zagged, Nintendo brought gaming to the masses and posted record profits. More recently, the Switch system has proven Nintendo still has comeback magic by giving gamers a console that works equally well on the big screen and on-the-go.
7. Atari
If Nintendo took video games mainstream in the 1980s, Atari invented the industry in the 1970s. The Atari 2600 console and classic games like Pong and Asteroids made Atari the Apple of its day. But a series of bad business moves, including the release of the legendarily bad game E.T. the Extra-Terrestrial, led to Atari‘s implosion during the industry crash of 1983. After changing hands multiple times over the decades (including a stint as a hard drive maker), the Atari brand was acquired by French company Infogrames in 2001.
Today‘s Atari is a different animal than the console maker of old. Under CEO Frederic Chesnais since 2013, the company has focused largely on monetizing its classic gaming IPs through licensing, mobile gaming, and casino gambling. Recent moves include the launch of the Atari VCS console, a Linux-powered living room PC/game streaming device, as well as plans to open a series of Atari-branded hotels with e-sports studios and augmented reality experiences. While still a minnow compared to its heyday, Atari has shown that even the most vintage of gaming brands still has life in it.
Rising from the Ashes
What can we learn from these seven remarkable resurrection stories? Here are the key takeaways:
• It‘s never too late. No matter how storied the brand or how dire its situation, there‘s always hope. Strong, visionary leadership and a sound strategy for the future can lift any company out from the depths.
• Remember who you are. Straying too far from your core identity and customer base is a recipe for disaster. Turnarounds often require re-focusing and doubling down on the essence of what made a brand great to begin with.
• Innovate or die. To quote Steve Jobs, you have to "skate to where the puck is going to be, not where it has been." Forward-looking innovation aimed at real customer desires (even ones they don‘t know they have) is essential to stay relevant as markets change. This is especially true in the face of digital disruption.
• Know your audience. Understanding exactly who your customers are and what they want is key not only to survival, but to growth. Intensive market research and testing is a smart investment when plotting a major brand pivot.
• Seize the digital opportunity. The shift to online shopping and entertainment has upended many struggling industries. But it also offers new avenues for connecting with customers and driving sales through e-commerce, mobile apps, social media, and more. Companies that figure out how to thrive in an omnichannel world will be the comeback stories of tomorrow.
• Embrace agility. To orchestrate a turnaround in today‘s fast-moving business environment, companies must operate with the agility of a startup – even if they‘re century-old brands. Migrating computing infrastructure to the cloud and adopting open-source software (like Linux) can give organizations the flexibility to rapidly iterate on product and respond to changes in the market.
So take heart – there‘s hope for any brand, no matter how battered, to defy the odds and rise from the ashes. By staying true to your core business while experimenting with new digital opportunities, even the most embattled company can fight its way off the ropes and stage a triumphant return.
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