We examined nine companies whose plans to revive their fortunes have not succeeded and found several common themes.  Managements often fail to appreciate the size of the challenges they face.  Competition is fiercer than expected and markets change. Further complicating matters are investors who often want results more quickly than companies can deliver. Of course, the line between success and failure is a thin one.

When things go well, as they did in the cases of Apple Computer Inc. (NASDAQ: AAPL) and Ford Motor Co. (NYSE:F), they can go spectacularly well. These happy endings, however, are rare.   Turning around failing companies is one of the hardest things for any executive to do.

Here is our list of 9 corporate turnarounds that have yet to turn around:

1. Borders Group

Borders Group Inc. (NYSE: BGP) may have a financial white knight,  or it may not.  Reports were out late last week that GE’s finance arm held talks about providing a financial lifeline.  Then came word that Borders hired restructuring lawyers.  It recently began delaying payments to vendors to conserve cash.  Let’s pretend that Borders does get a last-ditch financing pact and that it gets its debt refinanced.  What really changes?  Borders has faced eroding sales and the last sales gain for a year was in calendar 2006 (fiscal year ending Feb. 3, 2007).  The new figure was down roughly 30% by even a year ago since then.  Borders just trimmed 45 jobs at the corporate headquarters in Michigan and that is on the heels of a fresh plan to close a Tennessee distribution center to cut 310 more jobs.

Borders is now a penny stock and its market cap is a mere $64 million.  With shares back under the $1.00 mark, a delisting notice is a risk and more problems may be coming its way.  For some reason, the Fahrenheit 451 analogy keeps coming to mind.

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2. Boston Scientific

Boston Scientific Corporation (NYSE: BSX) is one that we (and many others) keep thinking will make a comeback.  The medical device maker has been riddled with device issues and recalls.  Its prior 3-year run of roughly $8 billion in revenues is expected to fall to $7.79 billion in 2010 and $7.91 billion in 2011, according to Thomson Reuters.  The only saving grace is that the earnings estimates of $0.39 EPS for 2010 and $0.43 EPS for 2011.  We see little risk to an implosion here, but the company is lost in space.

Competition from Johnson & Johnson (NYSE: JNJ), Medtronic (NYSE: MDT), St. Jude Medical (NYSE: STJ) is fierce, and its acquisition of Guidant for almost $27 billion has never really paid off despite Abbott Laboratories (NYSE: ABT) participating in that merger. At $7.33, shares are less than half and then some since its Guidant deal was completed.

3. RadioShack

RadioShack Corporation (NYSE: RSH) was supposed to turn around under Julian Day. There may still be reason  to expect a victory here Day. He has kept Radio Shack alive by slashing costs.  The fact that Radio Shack is still around may be the success.  Still, that hardly makes a turnaround.

The company had reportedly put itself up for sale but found no suitors.  Three years of sales figures stuck around $4.2 billion might be okay, but the concern now has to be that the estimates of $4.47 billion in sales for this year soon to end and $4.59 billion in sales for next year might be too high.  Unfortunately, recent 52-week lows have brought the stock back down to almost $17.00 and that is effectively where it started back in 2006.

4. Rite-Aid

Rite-Aid Corporation (NYSE: RAD) is the ugly duckling of the retail drugstore chain business.  The company imploded back in the 1990’s after a meteoric rise.  Despite many turnaround attempts, this company is struggling amid competition from Walgreen (NYSE: WAG), CVS Caremark (NYSE: CVS) and even Wal-Mart Stores, Inc. (NYSE: WMT).

The company loses money year after year and that is expected to continue.  Ride-Aid still suffers from a severe debt load and it said it would lose $525 millin to more than $650 million for the year coming to an end.

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5. Sears Holdings

Sears Holdings Corporation (NYSE: SHLD) is a shadow of its former self. Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corporation (NYSE: TGT) are keeping Sears from gaining much traction.  The company revamped its management and has had the longest “interim CEO” tenure with Bruce Johnson that we can recall.

Unlocking the billions of dollars in the land it owns underneath the retail store fronts was a goal, but that opportunity to unlock shareholder value has passed and it could be years before it is possible again.  Chairman Eddie Lampert’s gains now seem to all be on the hedge fund side of things.  Sears has seen a long steady decline in revenues which is expected to continue for this year about to end and for the next year.

6. Sprint Nextel

Sprint Nextel Corporation (NYSE: S) was supposed to do very well when Sprint acquired Nextel.   It turns out that Sprint’s business model is expected to remain unprofitable for the foreseeable future.  The company is so deeply tied to Clearwire Corporation (NASDAQ: CLWR) and its growing national wireless broadband operations that some argue you cannot consider one without the other.  AT&T Inc. (NYSE: T) and Verizon Communications (NYSE: VZ) are extremely formidable competitors and the HTC Evo just has not garnered the same interest as the iPhone.

It is hard to predict whether Sprint could easily unlock value by selling excess spectrum to its competitors.  A fresh round of price adjustment in its smartphone plans was not met with much enthusiasm from shareholders.  With losses still expected to remain prevalent ahead, it really feels like the only big upside is whether any of the old buyout rumors might resurface.  It wouldn’t be advisable to hold your breath for that.  At $4.36 per share, the 52-week trading range is $3.10 to $5.31.

7. Wendy’s Arby’s

Wendy’s/Arby’s Group, Inc. (NYSE: WEN) is in need of direction.  Being under the great Nelson Peltz has so far yielded very little reward for holders.  Fast food was supposed to be a winner of The Great Recession and in the recovery where so much of the country still has to mind its pennies.  The problem seems to be that consumers are always saying “I’m Lovin’ It!” over at McDonald’s Corporation (NYSE: MCD).

The company’s spin-off of Tim Horton’s Inc. (NYSE: THI) has performed well, but not enough to offset the decline in Wendy’s shares.   It seems that the real hope here rather than a turnaround is yet another rumor that he’s going to take this one private or a hope that a restructuring will do the trick.  As it stands today with shares close to $4.50, Wendy’s/Arby’s is stuck in the drive-thru.

8. Winn-Dixie

Winn-Dixie Stores Inc. (NASDAQ: WINN) is not alone in its quest for a turnaround in grocery land.  The company emerged from bankruptcy in 2006 with fewer stores than it had in the 1960’s.  Its effort to modernize stores has yet to bring any substantial revenue increase and its current Thomson Reuters expectation if for fiscal June 2011 and June 2012 to have financial losses and lower revenues coming in under $7 billion versus an average of about $7.3 billion in the three prior years.

The problem is that with shares at $6.41, the stock is down more than 75% from its post-bankruptcy peak and the slide down in shares seems to be almost constant.  You could almost make the same argument against SuperValu (NYSE: SVU), except that it did not have to go through a bankruptcy restructuring.  It is also impossible to ignore what has happened with Great Atlantic or A&P.  Wal-Mart Stores Inc. (NYSE: WMT) and similar competition is  a culprit, but at the end of the day it seems that there are two groups when it comes to grocery chains: well-run grocery chains and then all the losers.

9. YRC-Worldwide

YRC-Worldwide Inc. (NASDAQ: YRCW) may look and feel better now that it is not trading down in the pennies.  Unfortunately, that is just because of a reverse stock split enacted in 2010.  YRC-Worldwide did not recover much as the economy began to recover for transportation companies.  The shareholders probably wish they could go back and undo the merger between Yellow Corp. and Roadway Corp.  The economic slowdown killed the firm.  Then YRC-Worldwide had to get bondholders to exchange a large piece of debt for most of the equity in the company and it had to get union concessions in exchange for a stake in the company.  The Teamsters have now approved extensions for YRC to restructure its finances.

Revenues fell from $9.6 billion in 2007 to $5.28 billion in 2009, and the Thomson Reuters consensus shows expected revenues of $4.37 billion for 2010 and only back up to $4.46 billion in 2011.  Any hint of a positive earnings or cash flow positive goal would create a monster run with a likely short squeeze.

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JON C. OGG

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