From Near Failure to Fortune: 8 Companies That Turned It Around
For many of America’s most prominent companies, bouncing back from the brink of failure is a familiar narrative.
From global recession to E. coli outbreaks, history has proven that facing financial failure can result from unpredictable factors just as much as it can result from poor planning, even for industry juggernauts.
Here are some major players who have made the trip, and how they turned failure into financial success.
Also See: How Gen Z Entrepreneurs Are Shaping the American Economy
Try Them: 9 Unusual Ways To Make Extra Money (That Actually Work)
Why Best Buy Almost Failed
In 2012, Forbes ran the headline, “Why Best Buy is Going Out of Business…Gradually.” At the time, the company was hot on the heels of shuttering all of its Chinese locations and was planning to close 50 U.S. stores (an announcement that sent its stock price down by 8 percent). It also suffered blowback from former CEO Brian Dunn’s admission of engaging in an inappropriate relationship with a female employee.
How Best Buy Turned Things Around
At Best Buy’s investor meeting in late 2012, newly appointed CEO Hubert Joly pitched his “Renew Blue” plan, mostly based on the principles of cutting costs and focusing on online sales to grow profitability. Now, Best Buy is worth almost five times what it was in 2012.
Why Jack in the Box Almost Failed
In 1993, an outbreak of E. coli from undercooked hamburgers at Jack in the Box led to 700 illnesses, the deaths of four children and the awakening of public interest in the threat of food-borne illnesses. Amid one of the biggest food poisoning incidents in U.S. history, comparable-store sales at Jack in the Box dropped as much as 22% during the peak of the crisis and continued to decline for the following two quarters.
How Jack in the Box Turned Things Around
For those aforementioned two quarters, the drops were only in the single digits thanks to Jack in the Box’s quick response to the outbreak, including offering to cover the victims’ medical costs and overhauling its food preparation procedures.
Sales were back on track the following year, and the company launched the longest-running advertising campaign in quick-service industry history in 1995, featuring the smiling round head of its “founder,” Jack. By fiscal year 2021, Jack in the Box shares hit an all-time high of $116.
Why Chrysler Almost Failed
When Chrysler was on the edge of bankruptcy in 1979, $1.2 billion in loan guarantees straight from the federal government stepped in to save the day — or so the story goes. The bailout was indeed real, but more than 60,000 Chrysler workers had still lost their jobs by 1983. In reality, Chrysler’s famous bailout was a bit of a mixed bag. It set a precedent for another bailout in 2008, when the automaker was burning through more than $1 billion a month and bleeding tens of thousands of employees.
How Chrysler Turned Things Around
By 1982, Chrysler had temporarily returned to financial health thanks to its fuel-efficient “K” cars, turning an operating profit of $107 million during the second quarter of that year.
In the sequel to its 2008 auto-industry bailout saga, President Barack Obama forced Chrysler into federal bankruptcy protection during the global financial crisis in 2009. Revamped models and collaboration with Fiat helped the company return to profitability two years later, earning $116 million in Q1. When Fiat secured full ownership of the Chrysler Group in 2014, the sale cost the Italian company $4.35 billion.
Why Marvel Almost Failed
Despite the impact of superheroes and villains on American popular culture, comic books have had a tumultuous history as a business. After decades of ups and downs — including a successful market spike led by financier Ronald R. Perelman, who took over the company early in the 1990s — the Marvel Entertainment Group of the late 1990s faced declining revenue, steep losses and a delisted stock. To top it all off, the company ended up filing bankruptcy.
How Marvel Turned Things Around
The one-word key to Marvel’s turnaround is simple: movies. After licensing out its comic properties to other film studios for hits like “Blade,” “X-Men” and “Spider-Man” in the late 1990s and early 2000s, Marvel launched an initiative to creatively control its own films and unite its stories via a shared “cinematic universe” under the Marvel Studios banner. The move not only skyrocketed Marvel’s value to $400 million by 2003, it also revolutionized the mainstream movie landscape.
In 2009, Disney bought Marvel for a super sum of $4 billion. To date, the films in the Marvel Cinematic Universe have made billions at the global box office.
Win Money: Enter for a Chance To Win $500 in MoneyLion's Summer Break Giveaway (No pur. nec. Ends 7/4/26. See official rules at mlion.info/summerbreakofficialrules)
Why Starbucks Almost Failed
Given its ubiquity, it may seem unbelievable that Starbucks once faced a serious financial crisis. But such was the case in 2008, when Starbucks became one of the worst performers on the NASDAQ after a 42% slide in its stock price. Rampant overexpansion, tough coffee competition from fast food joints and dramatically rising prices for food commodities were a killer combo.
How Starbucks Turned Things Around
Starbucks acted quickly in 2008, bringing 1990s CEO Howard Schultz back to replace Jim Donald. The company’s stock immediately jumped 8%. Schultz’s efforts were wide-ranging. Starbucks completely retrained its baristas in the art of espresso making and significantly upped its focus on quality coffees. It also invested in its first national ad campaigns, closed 600 stores and reorganized its supply chain.
Why Burberry Almost Failed
Somewhere between its founding in 1856 and the mid-2000s, things went wrong for Burberry. The British luxury brand had lost its identity, licensing its iconic pattern to over 20 companies to produce everything from dog leashes to kilts. By 2006, Burberry was growing by just 2% each year, despite the overall growth of the luxury product market worldwide. In comparison, competitors such as Gucci and Louis Vuitton were making 10 times the amount of revenue as the British brand.
How Burberry Turned Things Around
As is often the case, a visionary new CEO righted the course. In this case, that CEO was Angela Ahrendts. She led a revitalized marketing effort that put intense focus on Burberry’s classic English startup story. She also reined in licensing to regain a sense of exclusivity and catered to millennial fashionistas with social media and digital marketing efforts. Within five years, Burberry had doubled its revenue and operating income.
Why Adidas Almost Failed
Just as the arrival of new leadership can reinvigorate a company, the departure of a beloved leader can tear it apart. When Horst Dassler, son of Adidas founder Adi Dassler, died in 1987, the loss of the founding family left the company deeply shaken. High leadership turnover and a muddled business strategy resulted in record losses and near bankruptcy by 1992.
How Adidas Turned Things Around
CEO Robert Louis-Dreyfus stepped into the Dasslers’ very big shoes (pun intended) in 1993 and saved the company. Louis-Dreyfus shifted the shoe company’s focus from sales to marketing — including major athletic endorsement deals — while making the company a corporation and, in 1995, finally going public. Between 1992 and 1996, Adidas more than doubled its gross profits.
Why CBS Almost Failed
Since its start in 1927, CBS had comfortably been one of the “Big Three” television networks alongside NBC and ABC. In the 1950s and ’60s, CBS regularly beat its competition in the ratings and gained a reputation for sophisticated TV storytelling. However, a touch of over-diversification in the late 1980s nearly led to a hostile takeover from Ted Turner. CBS finally had to let go of its independence amid falling ratings in the early ’90s, selling out to Westinghouse for $5.4 billion.
How CBS Turned Things Around
Starting his tenure in 1995, CEO Leslie Moonves went back to the company’s roots by putting CBS’s focus squarely on quality original programming. Into the 21st century, Moonves was quick to embrace the new format of video-on-demand, too, taking advantage of unique profit models to further diversify programming.
Summer spending adds up fast. Enter MoneyLion's Summer Break Giveaway for a chance to win $500 — and give your budget a break. (No pur. nec. Ends 7/4/26. See official rules at mlion.info/summerbreakofficialrules)
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: