Disruptive technologies -- think e-commerce, ride-sharing or social media -- are knocking some of the world’s biggest companies off kilter and erasing billions of dollars in market value.
While no one is suffering the fate of the buggy-whip makers a century ago, the pain is reflected in both earnings statements and stock prices. Here’s a look at the new technologies bedeviling some of the world’s best-known companies and brands.
Disrupting WPP: Options for Advertisers
Media giant WPP Plc stunned investors with its third warning in a year of lower-than-expected sales on Thursday, pushing shares down the most since August. Over the past year, it’s lost about a third of its stock market value -- some 8.35 billion pounds ($11.5 billion).
Since London-based WPP was built ground-up more than three decades ago through a web of acquisitions, the sprawling media empire run by Martin Sorrell has dominated the advertising industry. But the world as Sorrell, 73, knows it is changing dramatically: The industry is beset by a retreat from major customers just as online competition erodes its core business. Global consumer-goods giant and WPP client Unilever Plc is holding back ad spending to cut costs, while web companies cut out advertising agencies that act as middlemen and consultants like Accenture Plc and Deloitte LLP poach digital marketing work.
Disrupting H&M: Amazon and E-Commerce
Swedish retailer Hennes & Mauritz AB used to have a formula for growth in fast fashion: Keep opening new stores at an ever faster pace, blanketing the world’s city centers and shopping malls with outlets selling $5 T-shirts and $20 jeans. Then its industry was jolted by the rise of Amazon.com Inc. and nimbler online players like Inditex SA’s Zara, along with even cheaper and more cheerful discount chains like Associated British Foods Plc’s Primark.
H&M’s shares fell 33 percent in 2017 as the company struggled to catch up, investing more in e-commerce and new store formats. The stock plunged anew in late January as H&M reversed that strategy, stepping up store closings in its flagship chain. Hedge funds keep increasing their short positions, betting there may be worse to come.
Disrupting Hertz: The Rise of Ride-Sharing
Rental-car agency Hertz Global Holdings Inc. has been hit by new technology and emerging alternatives for travelers to get around. Ride-hailing services like Uber and Lyft have lured away customers at airport locations, where Hertz and its rivals have lots of cars to rent. Its fourth-quarter loss was wider than analysts expected on Wednesday, contributing to a 20 percent stock decline over the past year.