ADVERTISING agency 1576, which was behind iconic campaigns for brands such as Glenmorangie and VisitScotland, has collapsed following a period of managerial turmoil.
The Edinburgh-based firm, founded 14 years ago by a trio of top executives from rival city firms, has gone into liquidation.
The closure comes less than a year after the dramatic departure of four of the firm's directors, including co-founder Adri
an Jeffery, which remaining director David Reid said yesterday had left his company "in a position of limbo".
Founders Jeffrey, Reid and Mark Gorman have remained equal shareholders. The other departing directors were Ruth Lees, Gary Smith and Kenneth Fowler. The board was understood to have been in dispute for some time over the future direction of the company.
The agency recently moved into new offices in Leith, which is also understood to have put stresses on its finances.
1576, which built its staff numbers up to around 30 at the peak of its success, has had to axe 20 jobs as a result of the liquidation. It is believed that the staff numbers dropped dramatically when around ten staff left the firm to join the outgoing directors last summer.
The company's last audited turnover stood at £3.83 million.
Reid said: "The company had a strong client list and, having won three out of four recent pitches, there were a number of exciting projects in the pipeline. However, we found ourselves in a situation that was not tenable over the long term for either staff or clients."
He added: "The departure of two directors in the summer of last year put us in a position of limbo. Whilst they remained shareholders, although we could function on a day-to-day basis, we were prevented from making the necessary strategic and investment decisions which would secure our future.
"Failure to resolve these issues created cash flow difficulties, leaving us with no choice and very regrettably 1576 has had to close."
Co-founder Gorman, who left the company to run his own agency, Think Hard, in 2003, said it was a "sad day" for advertising. He told The Scotsman: "It is bad for the industry and sends out the wrong kind of signal, but these things happen. I don't think the failure was market-driven, it was the tough time they were having within the agency."
Jeffrey, who now heads up agency Mighty Small, added: "I put my heart and soul into 1576 for 13 years. And for a very long time it was worth all the effort and sacrifice."
Richard Marsham, managing partner at the Leith Agency, added that the current market was tough for Scottish agencies.
He said: "The more Scottish companies that are swallowed up by non-Scottish companies such as happened with Glenmorangie last year and also more recently with Scottish & Newcastle, the more chance there is that advertising contracts will go to London, or even abroad."
Liquidator John Montague of Grant Thornton was appointed on Thursday.
• Advertising and marketing agency Barker's is to lose its Scottish managing director of retail, Mary Lamond, and its financial director as part of a restructure of the UK-wide company.
UPS AND DOWNS IN WORLD OF ADVERTISINGADVERTISING agency 1576 was set up in 1994 by Faulds executive Adrian Jeffrey and former Leith agency employees David Reid and Mark Gorman.
After an initial setback when the firm lost their first and only client – Spectacles, now known as 20:20 – on their first day of trading, the trio went from strength to strength, building up a client list that included Glenmorangie, VisitScotland and Bell's.
The company was named 1576 after the numbers inscribed on the stones above the door of their first offices off Edinburgh's Royal Mile.
Gorman, who says himself that he had become "bored" by the corporate accounts that the growing firm eventually began winning, left in 2003.
But 1576's professional nadir came when four directors – including co-founder Jeffrey – left late last summer, leaving Reid as the sole director.
