People Are Sharing Famous Companies That Went Bankrupt Over Dumb Decisions, And Now I Finally Know What Happened To Circuit City
BuzzFeed
·22 min read
In light of OnlyFansreversing its ban on sexual content, you might wonder what other companies made seemingly dumb or greedy decisions that they really paid for later.
Well, look no further. Recently, u/WolfgangCaesarasked, "Now that OnlyFans is taking back its ban on sexual content, what other company bankrupted itself (or nearly bankrupted itself) through poorly thought-out or unnecessary decisions?"
People were quick to respond with companies that notoriously bankrupted (or nearly bankrupted) themselves over similar types of decisions:
1."One time, Red Lobster offered an unlimited [snow] crab leg deal. They brought the servings out slowly and were like, 'Nobody is going to sit there for six hours and just eat crab legs.' Actually, lots of people did — so many, they lost millions."
2."Photobucket changed its terms of service back in 2017. It then required a yearly fee for all those images you previously posted on it for free."
3."Quiznos. The corporate office decided to buy the vendors and then contract all of the franchises to only buy materials from corporate with a price hike. The margins got way too high, and all of the stores went out of business. They shot themselves straight in the foot."
4."Netflix almost bankrupted themselves as they made the transition from DVDs. They had a period where they dropped to dangerously low subscribers."
5."JCPenney tried to stop bullshitting customers, and it backfired. They said no more sales. They were just going to price everything low because pretty much all sales at department stores are lies, anyway. You’re not really getting 70% off — the retail price was deliberately set stupid high to convince you it was a great deal, but the discount price is the actual value of it. JCPenney’s heart was in the right place, but ultimately, it failed because customers are really that dumb and would rather be lied to."
6."In 1998, Yahoo refused to buy Google for $1 million. In 2002, Yahoo [was in talks] to buy Google, but Google wanted more money. Yahoo refused the offer. In 2006, Yahoo wanted to buy Facebook for $1 billion, but Facebook backed out. In 2008, Microsoft offered to buy Yahoo for $44.6 billion, but Yahoo refused. In 2016, Verizon bought Yahoo for $4.8 billion."
7."Sears ended their catalog/mail-order business in 1993. For over 100 years, they had sold everything from hubcaps to houses via mail order and shipped them all over the country. Amazon was founded in 1994."
"On paper, Sears had everything to be the e-commerce retailer that dominated the globe. By 1985, they had their own credit card, Discover, to rival MasterCard and Visa. They had their own insurance company in Allstate. They partnered with IBM to create 'Prodigy,' one of the first proto-ISPs in 1984, that offered all sorts of online services (except buying stuff from Sears) years before the World Wide Web existed. In theory, they were posed to make e-commerce a thing back in the late '80s and sweep the world in the '90s — with no chance for outsiders like Amazon, who had to build their stuff from the ground up, to catch on."
8."Kodak completely went under when they chose not to adopt digital photography. They eventually came back several years later, somehow."
9."A&W created the third-pounder. It was the same price as McDonald's quarter-pounder. It bombed massively. When they tried to find out why, it was discovered that Americans thought they were being cheated because three is a smaller number than four. A&W — realizing they can't explain grade school fractions to fully grown adults without coming across as condescending assholes — quietly took the burger off the menu."
10."In 2012, after a three-year hiatus in the sport, Lotus F1 team signed driver Kimi Raikkonen. His contract included a clause that stated Raikkonen would earn €50,000 for every point he scored in the two seasons of his contract. Raikkonen went on to finish third in the 2012 championship and fifth in the 2013 season — which was exceptionally impressive for Lotus. In doing this, he scored 390 points in two seasons. He earned €19.5 million off of that bonus alone, which led to Lotus almost filing for bankruptcy."
11."Circuit City. It was a major retail chain in the 1980s that collapsed under mismanagement. Its arguably biggest blunder was firing all of their experienced, better-paid workers for cheaper, inexperienced ones. Apparently, selling merchandise and keeping customers happy are important in the retail business. Who knew?"
12."Borders Books. A conversation happened between Amazon and the giant Borders Books. This Internet thing was starting to look like it would harm retail sales, so Borders agreed to sell books online through Amazon. By 2007, Borders ended its marketing alliance with Amazon."
13."Quibi — when it decided that 10-minute clips watched in portrait on a commuter train is the future of home entertainment."
14."Ayds Diet Candy. They didn’t change their name after the emergence of the AIDS virus."
15."Yik Yak. It was a completely anonymous message posting app at first. Obviously, it became a fun anonymous messaging app. They then started to make it less anonymous by introducing usernames which — while they can still be throwaway usernames — certainly made people lose the favor of the app. They eventually shut down."
16."Vine. It seemed like the best thing at the time."
17."Schlitz. Throughout the '60s, it was one of America's biggest national beers. In 1974, Schlitz's president and chairman, Robert Uihlein, Jr., believed beer drinkers couldn't distinguish their favorite beer from other brands and oversaw the introduction of a slimmer brewing process. It replaced barley with corn syrup and used silica gel as a preservative during the brewing process that was then filtered out, i.e. didn't have to be listed as an ingredient. Instead, the beer spoiled faster, grew cloudy on racks, didn't produce a frothy head when poured, and was flavorless — resulting in a 100-million bottle recall. Schlitz also didn't realize light beer was becoming a thing, so it got its clock cleaned by Bud and Miller. It then ran an ad campaign with some belligerent-sounding guy threatening to kill another guy, who was off-camera, if he took his Schlitz away. By the '80s, it went back to its original brewing process, but the damage was done."
Here's one ad from the "Drink Schlitz or I’ll kill you" campaign:
18."Digg was bigger than Reddit until they decided to force changes on the site. The changes were immensely unpopular — to the point where users began posting Reddit links as a way of rebellion. Digg stuck to their new ways and collapsed."
19."Blackberry. Most popular smartphone in the world — then they were less than 1% of the market share, and their stock value dropped. A couple of years ago, they announced that they would focus more on software and essentially gave up making phones. Lots of BlackBerry executives took advantage of their market share and thought a flat, touchscreen phone wouldn't take off the way it did. How the mighty have fallen."
20."Schwinn. The executives of America's most venerable bicycle maker could not be convinced that mountain bikes were anything more than a fad. They made one and called it the Klunker (yes, really). They then got an Asian company to design a mountain bike for them. Today, Schwinn is just a brand name someone else owns."
21."MoviePass was a weird one. Their model was too good to be true. They lost money on every subscriber who was seeing more than two movies a month — which was most of their subscribers."
22.And last but not least, "There was a donut shop by my high school. It opened at 6 a.m. and closed at 5 p.m., so students would be there every day before school started at 7:30 and after school ended at 2:15. They changed their hours to 8 a.m. to 3 p.m. and couldn’t make any more money. They shut down a few months after the change."
Did you remember all of these companies and know this is what happened to them? What other companies would you add? Let us know in the comments below!
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