Left: John Denholm shortly before Sue dropped her bombshell. Right: Sue Mullen shortly before dropping the bombshell. Photography : Paul Hampton, The Picture House UK.Scotland's direct marketing community is nothing if not close-knit. So, when rumours began circulating last week that all was not well at Leith Links, the home of Oneagency, needless to say, phones began ringing across Edinburgh and e-mails began dropping into in-boxes as the ever faithful grapevine sprang into action.
A brief phone call from one of Oneagency's Scottish rivals, whom we shall call Mr Grapevine, alerted The Drum to the fact that sweeping changes could be imminent at The Leith Agency-owned DM agency, which has in the last four years picked up more than 90 international awards for its work under the guidance of managing director Sue Mullen, creative director Dave Mullen and client services director Sheila Gallagher.
A voice mail shortly thereafter from The Leith Agency's chairman and 80 per cent owner of Oneagency, John Denholm (stating that there were to be some management changes at Oneagency), did indeed indicate that the age-old adage 'there's no smoke without fire' again held true.
Sue, Dave and Sheila tendered their resignations from Oneagency on Wednesday 16 January, perhaps not the start to the year which Leith Agency boss Denholm was expecting, but nonetheless one he was stuck with.
"Their resignations came out of the blue," he says. "We had had off- and on-negotiations with one party looking to acquire the agency last year, but in the end both parties had decided not to pursue it."
It is believed that the company in question was KLP Euro RSCG. However, following the events of 11 September and the subsequent drawing in of budgets by many international agency networks, the deal soured.
Denholm goes on: "Dave and Sue have a significant stake in the company, holding 20 per cent, which would have delivered a significant return for them had those negotiations come off. But I suppose when you go through a negotiation like that there may be a change in ambition for the future.
"An MBO had been talked about, but nothing concrete had been put down. That had gone all quiet and I had assumed it was business as usual, but they had been thinking about the future and wanted a change."
It cannot be said that Sue, Dave and Sheila have not served their time and served it well. The agency was launched in 1990 as One To One by Gary Smith (now head honcho at Draftworldwide), Sue Mullen and Jan Young, who later married Smith. A year later Dave Mullen arrived, after working for Brann, the company which Sue had also worked at in London and Stewart Robertson. In 1997 Smith left One To One to launch the agency now known as Draftworldwide; his departure opened the way for Sue to step up to the position of managing director.
At that time the Mullens were both given a 10 per cent stake in the agency, with 80 per cent remaining in the hands of the Silvermills Group, the parent company of The Leith Agency. That is still the case with Sheila Gallagher still having no shareholding in the company.
In 1997 the agency was coming out off what was said to be a pretty bad year, losing the Clydesdale Bank business, which the agency subsequently picked up again last year. However, in December 97, shortly after the Mullens had taken over, the agency picked up the Northern Ireland Tourist Board account that acted as a catalyst for the agency's development and growth. Early the following year the agency picked up the First Direct Business, followed by Standard Life Investments and has gone onto collect a whole host of creative awards, making Oneagency the most creative DM agency in Scotland.
The agency was rebranded to Oneagency in 1998 and Sue Mullen has said in the past that the rebrand only fuelled the agency's growth and developed its personality further.
She was remaining tight-lipped about their plans for the future, but industry sources strongly suggest that plans are being hatched between the Mullens and Gallagher, who has extensive experience after working for many years at TMS in London on clients such as Microsoft and Associated Newspapers, to launch their own below-the-line agency.
Speaking of the decision to depart, Sue Mullen said: "We had some very happy times at Oneagency, but we feel it is time for us to move on. I'd like to thank everyone, both clients and staff, who helped us build this business.
"We are leaving the agency in a robust position. When we took over the agency it was making a loss. In four years we have made a £1m profit on £10m turnover, so the agency is in the best shape it has ever been. It is sad to leave, but after 11 years we feel we have done our bit here."
Stewart Robertson, managing director of Marketing Advantage DDB and former boss of Dave Mullen, said of the news: "It does not surprise me. I was on a train with Sue recently and she was fascinated to find out about the DDB network which we are now part of. They did really well at the recent awards, standing there as one of the best DM agencies in the UK and I would think there was massive frustration that they still only owned 20 per cent of the agency. That should have been redressed. If they start up on their own they will be a big threat and even more ambitious because presumably they will own a significantly bigger chunk of the business than they ever did at Oneagency."
So, while Denholm may have thought his first task of the year was to try and get his advertising creatives to realise that the Christmas festivities were over he is in fact now on the hunt for a management team for Oneagency, to which he says The Leith remains committed.
"I am looking to recruit an MD and a creative director and I have already spoken to some great candidates both in the South and here in Scotland, but obviously I cannot and would not say who they might be. We are certainly committed to keeping Onegancy as part of The Leith group. When we started negotiations Oneagency had started to make a good profit. Over the course of those negotiations it had increased; so much so that it has become very profitable and obviously we want to keep that. There is an increasing amount of synergies between The Leith Agency and Oneagency, perhaps more so than there ever was between The Leith and EH6.
"Some people may start saying Oneagency is in trouble and The Leith is not committed, but they could not be more wrong. We see this as phase three for Oneagency. Phase one was when Gary Smith launched the agency. Phase two was when the Mullens took over four years ago and they have developed it in their own way. I would like to see phase three with a new management style which is even more expansive and which will really push Oneagency to the top of the tree."
The departure of the management team from the agency, which employs around 25 staff, will inevitably lead to a few nervous clients. However, Denholm says that he is now in the process of quelling any fears.
"I am contacting clients now to say it is business as usual. Oneagency has become quite big and profitable and there is a really good team of people there. The business does not hinge on just two or three people. My main thing at the moment is just to assure clients that the systems are in place to ensure that things can go on the way they were before this.
"We would hope not to lose clients. Good corporate clients stick with the company. The arrangements are with the companies. Sue and Dave have been around for a while so we will have to reassure our clients that it is business as usual and we have good people coming after them. But at the end of the day we will have to prove to them that we have what it takes to go forward and take their businesses forward."
While the Mullens and Gallagher do not officially end their three-month notice period until 27 March, a smooth handover is something which they are committed to achieving for the sake of the staff and the clients in which they have invested so much time and effort in the last four years.
"They are seeing out their three-month notice period, so we have three months to bring the new people on board," says Denholm. "They have got on really well and have made the agency very profitable. They have committed to ensure there will be continuity for both the staff and the clients and they continue to hold a stake in the agency."
So, there endeth the tale ... or is it a new chapter about to be opened in the Scottish direct marketing industry?