Winners & Losers 2009: The morgue/intensive care unit

It will take heroic measures to save some of these businesses. Others are beyond helping.

ICU = Intensive care unit
M = Morgue

ICU: Muzak
Muzak may be best known for supplying elevator music — instrumental versions of pop hits. But it began by transmitting original songs over utility lines and into businesses during the 1930s. The late ’90s marked a shift back to creating unique content. But that focus, along with providing compilations of tracks from established artists, hasn’t proven profitable in recent years. The South Carolina-based company filed for bankruptcy protection in February and has since lost US$21.6 million.

ICU: Canwest Global Communications
Weighed down by billions in debt, the Winnipeg-based conglomerate’s holding company Canwest Media, which included Global Television and the National Post newspaper, filed for protection from creditors. While a decline in the advertising market was partly to blame, as was management’s overly optimistic view of future revenue, the root cause was Canwest Global’s ambitious growth plans, which resulted in the $3.2-billion purchase of the Post and other Hollinger newspaper assets in 2000.

M: Nortel
A string of dubious acquisitions during the dot-com bubble, accounting fiascoes, the rise of low-cost foreign competitors — Nortel seemed destined to fail. Still, some of its long-suffering shareholders saw a glimmer of hope when the telecommunications equipment manufacturer hired Mike Zafirovski, a former star Motorola exec, as CEO in 2005. Zafirovski’s turnaround plan, though, couldn’t prevent Nortel from having to seek creditor protection in January, and then closing shop in June.

ICU: Air Canada
The airline averted a second bankruptcy filing in about six years, after successful negotiations with its five unions. But the Montreal-based company predicts that the airline industry won’t see a recovery in sales for 12 to 18 months. Contract negotiations have simply moved its big pension-funding problems into the future.

ICU: Simmons Co.
Even the comfiest Simmons mattresses may not have been enough to help management at its Atlanta headquarters to sleep well in recent years. The debt-laden company filed for bankruptcy protection this year and was eventually acquired by private equity funds Ares Management and Teachers’ Private Capital, a division of the Ontario Teachers’ Pension Plan.

ICU: Cotton Ginny
In November, the Mississauga, Ont.-based chain of women’s clothing stores filed for bankruptcy protection for the second time in less than a year. The retailer has focused recently on environmentally sustainable products, such as kimono-inspired pieces made using bamboo fibres, but with seemingly little success.

M: Kodachrome
Kodachrome was launched in 1935 and went on to become the world’s first commercially successful colour photograph film. But Eastman Kodak, headquartered in Rochester, N.Y., announced in June that it would discontinue sales of the product, citing a decline in demand as a result of photographers turning to digital cameras and other types of film.

ICU: Playboy Enterprises
It’s CFO recently quit. Founder Hugh Hefner has reportedly begun selling tickets to his celebrity-studded parties because of cash flow problems. Rumours swirl that the Chicago-based publisher of one of the world’s best-known magazines is for sale. The company has now strung together eight consecutive quarters of losses.

ICU: Magna Entertainment Corp.
Auto-parts king Frank Stronach envisioned MEC to be a Disney World for adults that centred around horse racing. Overexpansion, executive turnover and plummeting real estate values caused the Aurora, Ont.-based business to file for bankruptcy protection in March.

M: Circuit City
Circuit City ran going-out-of-business sales at its 567 U.S. stores after failing to find a buyer for its American operation. The retailer, based in Virginia, filed for bankruptcy protection in late 2008, but the move caused a sharp fall in sales, as shoppers worried about the chain’s ability to make exchanges or honour extended warranties. Bell Canada Enterprises bought Circuit City’s Canadian stores under the Source banner.

ICU: Samsonite
The luggage manufacturer put its retail division into bankruptcy protection in September, blaming the recession for causing a severe decline in the demand for travel-related goods. The Massachussetts-based company operates 173 stores in the United States.