Art & Commerce | Adweek Art & Commerce | Adweek
Advertisement

Art & Commerce

Advertisement




Demerger Outlining the grand plan to "unwrite" a decade's worth of goofy history, demerger documents provide a look at three new companies: Cordiant Communications (mostly the Bates ad agency), Saatchi & Saatchi (a holding company mostly for its eponymous ad agency) and Zenith Media. The first two will emerge in December as publicly quoted companies. Zenith, at least at the outset, will then have Cordiant and Saatchi as its shareholders. How will these liberated entities fare? Probably no worse than before; maybe even better if the ad market stays strong for a few more years. Bates is telling the financial community that a priority will be boosting margins, and newly released figures show some of the challenges. In North America, where revenue per employee is quite respectable, margins are depressed because of expensive real estate; Asia/Pacific is in investment mode. Tough management can straighten this out. So can a stream of account wins. -Alan Gottesman (westendal pobox.com) is principal of West End Consulting.


THE GOTTESMAN FILE

New Cordiant Communications would have looked like this in 1996.

..........Revenue*.....Operating income*.....Operating margin.....Revenue/employee
.....U.K......£40.3.....£4.0.....9.9%..... £69,483
.....North America.....£89.7.....£5.8.....6.5%.....£78,068
.....Rest of Europe.....£122.5.....£9.1.....7.4%.....£76,515
.....Asia/Pacific.....£94.3.....£4.7.....5.0%.....£59,122
.....Total.....£346.8.....£23.6.....6.8%.....£70,416
..........Source: Company records. *Figures in millions of pounds