Layoffs, Cutbacks Fail to Keep Clear Ink Afloat

It’s been over a decade since Clear Ink—then called Shugart Matson—opened its garage door for business in a Castro Valley, Calif., home. This week, the Walnut Creek, Calif. shop is poised to shutter operations.

Its board of directors has voted to recommend to shareholders that the shop cease operations Sept. 26.

“We were hanging in there, trying to find a merger partner or even make an acquisition ourselves,” said agency president and CEO Kim Shugart. “It was noble effort on all fronts. If we’d been a little lucky, it might have ended up differently.”

Shugart alluded to a number of accounts the agency had won recently that never came to fruition because the client either went belly up or decided not to invest in advertising. That, coupled with a few second-place finishes in key pitches, left the agency with few options.

Clear Ink had capitalized billings of more than $150 million in 2000. Just last year, the full-service agency employed nearly 140 people. After a series of layoffs and salary cuts, the shop had been whittled down to 40 as of last month.

Shugart plans to spend the next few months helping with formal shutdown procedures and finishing up work on accounts. After that, he will spend time with his wife Diane—who was a co-founder of Shugart Matson—and two children before jumping back into the business.

The shop was founded in 1989 as an integrated marketing communications firm. In 1995, it helped found a Web development company called Clear Ink. Both companies grew and then merged into one fully integrated professional-services business in January 2000.

David Burk, president and COO of Clear Ink, said he plans to restart the Internet professional-services business side of the company and hopes to retain the Clear Ink name.

Clear Ink recently produced work for Jelly Belly and the San Francisco Opera. Its other clients included Novell, Oral-B, Pacific Bell and Restoration Hardware.