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Leagas Delaney (UK)

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Much admired during the 1990s, creative agency Leagas Delaney has maintained a somewhat lower profile in recent years. Attempts to build a wider global role through merger with a Canadian marketing services group were compromised by post-2000 market turmoil. Instead the agency developed a modest international network of its own with the intention of staying independent. So it has remained, with the support of a small collection of multinational clients. The path has not always been smooth but the business continues to maintain a healthy presence in six other countries in addition to its base in London, and remains very profitable.

Competitors

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Clients

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Brands & Activities

Once among the UK's most highly admired creative agencies, Leagas Delaney has found life a little more challenging in recent years, but it continues to manage a small international network.

Although it no longer generates the level of attention it once enjoyed, Leagas Delaney continues to motor along quietly, with support from a handful of long-standing multi-national clients. The group is headquartered in London, but also has offices in Hamburg, Tokyo and Shanghai. A key market is Italy, where the group also has specialist design and digital units in Milan. Leagas Delaney Italia was appointed as lead global agency in 2014 for local communications giant Telecom Italia. A Paris office closed in 2004, then reopened again briefly in 2009. A Prague outpost closed in 2015 after it lost the domestic Skoda account. There was also at one point an office in San Francisco. This performed well during the internet boom years, but later slumped disastrously and was sold in 2003 to managers (becoming BuderEngel & Friends). A new Los Angeles office was opened in 2014.

Billings have fallen dramatically since the agency's golden period in the 1990s. In 1998, the London agency ranked just outside the UK Top 20 with billings in excess of £60m. According to Nielsen (in Campaign) UK billings for 2015 were just £8m. However, the bulk of the company's business is now generated in other markets.

Group accounts for 2016 showed turnover (billings) for Leagas Delaney Ltd of £27.9m. Gross profit - effectively net revenues - was £16.3m, but a sharp increases in costs resulted in a £553k loss. Almost 85% of revenues were generated from non-UK clients.

Management

Tim Delaney remains group chairman and executive creative director, as well as the company's biggest shareholder with around 70% of equity. (Brother Greg was one of the founders of what is now MullenLowe London, originally Delaney & Delaney; another brother, Simon, is a noted commercials director). Margaret Johnston is group chief executive, and owns the remaining 30% of the equity. There are separate minority partners for several of the international offices.

Background

Leagas Delaney was founded in 1980, a spin-off from the UK office of American giant BBDO. However six years later founders Ron Leagas and Tim Delaney fell out. Leagas left and Delaney agreed to sell the agency to Abbott Mead Vickers. By coincidence, AMV itself acquired BBDO UK in 1990, becoming the UK arm of the worldwide network. For a time, Delaney functioned happily as the second-string agency in the growing AMV portfolio. However there were an increasing number of client conflicts, especially after BBDO announced plans to take full ownership of the British agency.

In 1998, Delaney bought out AMV's stake and re-established the agency itself as an independent. With the support of pan-European client Adidas, Leagas Delaney began developing its own international network. A San Francisco office had already opened in 1996, and this was followed by a network of satellite shops in Europe. At the end of 1998 the French office was upgraded to a full agency with its own creative and handling team, and a German agency was launched in early 1999. The UK agency also launched a spin-off internet design company, The Digital Partners.

Towards the end of 2001 Delaney made plans to give up its independence once more, agreeing to sell out to Canadian group Envoy Communications. The original deal was that Envoy would pay £25m in cash and shares upfront, followed by a further £35m at the end of a four-year earn-out. However that deal hit a series of snags as the global economy continued to weaken. In early 2001, Delaney forced a renegotiation of terms following a sharp drop in Envoy's share price. Soon afterwards, the shoe was on the other foot when Envoy demanded further talks in the light of poor performance at Delaney's San Francisco office, which had been heavily dependent on dotcom clients. By mid-2001 the Envoy deal was looking increasingly fragile, and it finally fell apart in July.

Long-serving chief executive Bruce Haines also left in 2001, apparently as a result of disagreements over strategy with chairman Tim Delaney. However the most crushing blow was the loss of the Adidas account to TBWA, as well as Barclays Bank in the UK. Further accounts departed as well as senior staff, but the agency had largely stabilized by 2002. A new round of problems forced another restructuring at the end of 2003, but the following year saw the departure of additional clients, including Hyundai.

Last full revision 1st July 2016

* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *


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