Reid’s woes can be traced back to June – when fellow board director and shareholder Gary Smith handed in his resignation.
His resignation seemed to open the flood gates with a spate of resignations that included Ruth Lees, Fife Hyland and Kenneth Fowler – robbing the agency of its intellectual core.
The final straw came when co-founder and creative director Adrian Jeffery announced that he too was set to leave.
Rumours of financial mis-management circulated with some anticipating the agency would sink without trace there and then.
But David Reid mounted a determined rear guard action that saw him replenishing the staff roster with the likes of Bastiman, Rob McLeod and Abigayle King.
Their brief was to secure the agency’s key accounts such as Glemorangie, VistScotland and Bank of Scotland.
But the clients had been spooked. VisitScotland moved much of its business to The Union and strong rumours suggested Bank of Scotland was headed for Gary Smith’s new shop.
Said Bastiman, “We were peddling like fury, but we had this millstone around our necks. All the client feed-back suggested the new team was improving the performance of the agency and the level of service. But it was just too late.”
That dark Thursday, as receivers Grant Thornton took over the running of the business, the staff headed for the pub, and then for a curry. A skeleton crew will be retained to handle any work in progress, but as The Drum went to press nobody was answering the phones at 1576.
It is an end which is in stark contrast to the agency’s optimistic beginnings. Launched over 13 years ago out of the basement of an Old Town building – which dated from 1576 – the agency soon made its mark winning Hollywood Bowl, The Blood Transfusion Service and Smiths Menswear.
Bigger accounts such as VisitScotland and Glenmorangie followed cementing the agency’s reputation as a top Scottish shop. However, it never quite broke through to the number one spot.
After nine years at the helm Mark Gorman resigned as MD and David Reid, then creative director, stepped into his shoes. 2004 saw Gary Smith joining the business as an equal equity partner – along with Reid and Jeffery – he got a 30 percent stake.
Footnote in History
Said Mark Gorman, “I look back on the agency as being a success. It’s the closing of another chapter on Scottish marketing. Every agency has its day, even Jim Faulds has said that he knew that Faulds would one day be a footnote in history, although he perhaps didn’t predict the way that it happened. Neither did I.”
“I put my heart and soul into 1576 for 13 years, I along with David and Mark, risking everything to start it. And for a very long time it was worth the effort and sacrifice.”
Adrian Jeffery gave an insight into how the business share structure may have been a factor in its demise.
“When I and the other shareholders left, every one of us agreed to hand over all rights to our shares so that David and his new management team were free to make their own strategic and investment decisions unheeded. Sadly for us, it didn’t work out.”
However, industry comentators have been quick to point out that 1576’s closure doesn’t point to impending doom for the industry.
“It’s very sad news to hear about a quality agency closing its doors,” says John Denholm, chairman of Denholm Associates. “As far as I understand it though, David’s efforts to keep the business going were hampered by management issues rather than any particular weakness in the Scottish advertising market.”
David Reid, was not available for comment as The Drum went to press. However, in a statement he too suggested this shareholder agreement did not work in practice.
“The departure of two directors in the summer of last year put us in a position of limbo,” he said. “Whilst they remained shareholders, although we could function on a day-to-day basis, we were prevented from making the necessary strategic and investment decisions which would secure our future.
“Failure to resolve these issues created cash flow difficulties, leaving is with no choice and very regrettably 1576 had to close.”