Supermarket analyst David Livingston, of DLJ Research
, says A&P
has long lacked financial discipline, something made clear by its overpriced purchase of longtime rival Pathmark
"For reasons that I could only speculate, A&P overpaid for everything. Rent, transportation, goods and products sold in their stores, acquisitions of other stores and wages," he says.
Post-bankruptcy, the company -- once the dominant supermarket chain -- is in desperate need of a management overhaul. "Get out of the grocery business, because you are not very good at it," Livingston says to the top brass. "When I talk with other industry insiders they are just amazed at the total mismanagement of A&P. The punch line to all the industry jokes was 'Thank God for A&P,' meaning having them as an ineffectual competitor made life a lot easier."
Hundreds of stores should be closed or sold, and most likely will be, Livingston says. "Most of the competitors completed their wish list a year ago of stores they would like to acquire," he says. "They couldn't reach a deal with A&P, but perhaps after bankruptcy, they can. Maybe the company can be more efficiently operated with Executive Chairman Christian Haub out of the way, renegotiated leases at market rates and supply agreements that are more fair."
"If you can't beat them, join them" might be the best advice for MySpace, and a strategy it seems to be following.
Once upon a time, MySpace was neck-and-neck with Facebook in the social media footrace. It lost. An unlikely savior emerged when News Corp. bought the company, part of Rupert Murdoch's Web technique of plunging into a pitch-black room, slamming the door shut and stumbling around hoping there's a lamp somewhere. A strategy has finally emerged: With a rebranding announced in October, MySpace is becoming less a social network than a content aggregator pushing media. A "personalized stream" determines what to feature based on a user's preferences, habits and online connections. More than 20,000 entertainment-focused pages will be organized around topics using content from news sites and blogs including MTV, Access Hollywood, Los Angeles Times, New York Times and Village Voice.
You can even now use Facebook log-in info to access MySpace accounts, and there will soon be "like buttons" sharing info between sites.
"I was fully prepared to rail against the new strategy as trying to keep a dead brand afloat by addressing a need that wasn't real," Zak Kirchner, senior research Analyst at Interpret LLC, wrote last month. "MySpace actually has a decent chance at pulling off one of the biggest rebranding efforts the social media space has seen yet."
Blockbuster was once the go-to chain for movie rentals. Now, saddled with debt and forced into Chapter 11 bankruptcy, it struggles to stay solvent and relevant.
Retail Management Consultants' George Whalin agrees with analysts who say Blockbuster's "store-based business model is no longer viable."
Netflix, which mails DVDs and streams online, Coinstar's Redbox kiosks in grocery stores and the on-demand services available from cable and satellite providers all plunged daggers into the company's back. Adding Apple TV, Roku and the long-awaited Google TV to the mix spells even more trouble.
"To survive, Blockbuster must find another way to do business," Whalin says.
Blockbuster does offer streaming and has Redbox-like rental kiosks, but you might have better luck filming Bigfoot that finding one. Plans were to expand the number of Blockbuster Express DVD rental kiosks from 1,000 to 10,000 this year, but only 7,500 look likely compared with Redbox' 25,000-plus -- a number growing rapidly thanks to an agreement with CVS and with convenience stores and gas stations nationwide.
Even given Redbox's significant head start, an expansion of the kiosk business would be a boon to Blockbuster -- if it in fact owned them. The Blockbuster Express DVD rental kiosks are actually owned by NCR, which licenses the Blockbuster brand.
Salvation might come from a focus on online services and a move to ditch all the real estate.
The company needs to keep bragging about its rights to rent DVDs at the same time they go on sale, while Netflix and Redbox have to wait 28 days, but also to make more distributor deals and partner up: Blockbuster announced strategic alliances last year with TiVo, Samsung and Motorola. Its movie download service is embedded in the HTC HD2 smartphone, and an iPhone app has been a success.