GGK’s loss of the Ãº8m Skoda business puts a question mark over the future of the agency, whose parent company is already in receivership.
It follows a string of crucial account losses. The National & Provincial building society pulled its Ãº7.5m account out of the agency in January (MW January 27). GGK lost the Ãº1.5m IBM account last year.
Despite this, GGK chief executive Andrew Hawkins says the agency’s future is secure. He claims Ãº19m of billings, including Ãº7m of new business. This includes Allied Bakeries’ Allinson and Kingsmill bread accounts (MW March 10) which GGK won this year. Hawkins says these are worth Ãº6m, which in itself would double last year’s Ãº3m (Register-MEAL) spend on the brands.
Only three years ago GGK’s billings were worth some Ãº60m, and the agency’s creative reputation was bolstered by its work on Heat Electric’s Creature Comforts campaign.
Hawkins says: “We have ten decent standing accounts, and will continue as long as we are profitable.” He says talks about a management buy-out from GGK’s Swiss parent – which has been in receivership for more than a year – are still underway.
One source says GGK’s London management offered the Swiss receiver Ãº200,000, but it was turned down. “Maybe this will be an acceptable price now,” he adds.
But Hawkins has ruled out a merger with GGT, which has increased its stake in GGK from ten per cent to 25 per cent.