Fledgling business-to-business holding company 3i has shuttered its only agency and parted with one of its two founding executives.
The Chicago-based company, which had expected to have five to six b-to-b shops by the end of this year, has closed Des Moines, Iowa-based CMF&Z, which was saddled with debt from its acquisition, said 3i CEO Sean Bisceglia.
"We gave it 8 months of survival that it wouldn't have had," Bisceglia said. "Our secured creditor did not want to continue funding the company."
In September, CMF&Z was forced to cut 15 people, nearly 40 percent of its staff. The closure affects the remaining 25. The holding company had worked out "transition plans" with the agency's few remaining clients, Bisceglia said.
In addition, Philip de Roziere, 3i's president and chief financial officer, has left the company to "pursue other interests," Bisceglia said.
Despite the setbacks, Bisceglia said he remains committed to building a network of b-to-b shops with expertise in sectors ranging from transportation to manufacturing.
"We're still excited and bullish on the original vision and will pursue it," Bisceglia said. He said he will continue to meet with private creditors for financing and will name de Roziere's successor within six weeks.
The holding company, however, will look to acquire only agencies with healthy balance sheets in the future, Bisceglia said.
"What we learned is we can't have any turnaround companies in the 3i strategy," Bisceglia said. "We had a setback, but it was the right decision for the [new] strategy."
Bisceglia was founder and CEO of TFA, a high-tech b-to-b shop. He sold it to Leo Burnett, Chicago, in 1998, but left the agency in March 2001.