Almost a year ago, I asked whether Blockbuster was the next Circuit City. About 66% of Foolish poll respondents said it was, and Blockbuster's recent bankruptcy filing ultimately proved them right. The former video-rental king's slow death may seem a bit anticlimactic, but it's a great illustration of the increasingly Darwinian landscape companies now face.
Blockbuster struggled with both formidable debt and a mighty, disruptive rival in Netflix
The retail landscape faces no shortage of challenges. Two years ago, I urged investors to give Borders Group
Other brands that once depended on baby boomers' lucrative largesse may now have to survive a leaner future. With many members of this demographic staring down the barrel of a fiscally difficult retirement, boomers are clamping down on their spending. As a result, boomer-beloved brands and retailers such as Harley-Davidson
Blockbuster's sad, seemingly overdue outcome should remind investors to invest among the winners in the stock market's eternal game of "survival of the fittest." Go for the strongest brands with wide demographic appeal. Make sure the companies are well-run and have a solid track record of evolving and innovating with changing times, like Netflix and Amazon.com.
Avoid companies with unwieldy debt, especially if they're also posting dwindling sales. Investors had plenty of time to evacuate Blockbuster before it sank, and similarly unfit companies could easily share the ailing video-rental company's fate.
Which stocks on the market today would leave Charles Darwin sadly shaking his head? Share your thoughts on the worst and weakest contenders in the comments box below.
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Alyce Lomax does not own shares of any of the companies mentioned. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool has a disclosure policy.