Battleship and losses sink Rapier

A disastrous over-investment in office space and a litany of account losses has forced Rapier – the one-time darling of the DM agency world valued at £50m – to go bust, although the Rapier brand, assets and goodwill have been snapped up by CHI & Partners.
The move, which is likely to result in a swathe of redundancies, sees the creation of a new 50/50 joint venture Rapier Communications headed up by chief executive Jonathan Stead. It is understood Stead is in negotiations with remaining clients Travelodge, BBC, Vodafone, and PruHealth, about retaining their business.
It has been reported that creative boss Ed Morris and planning partner John Shaw are among those who will exit, although Shaw is expected to work with the team as an independent brand consultant.
Back in 2005, speculation was rife that Rapier would be sold off, with some valuations exceeding the £50m-mark – on the back of its impressive client portfolio. At the time it held the £50m Lloyds TSB account as well as the £40m Virgin business. However, it was understood Stead was unwilling to do a deal.
Then Lloyds TSB switched its business, and Virgin went to Rainey Kelly, while RAC and Yell put their accounts into BBH and Engine respectively. A further blow was the loss of creative partner John Townshend, who quit early last year to set up his own agency Now.
Rapier also moved premises, taking out a costly lease at Battleship Buildings (pictured), a former British Rail depot which was turned into a lavish office suite by Allford Hall Monaghan Morris Architects.
Stead said: “The commercial environment is tough for all agencies currently. Unfortunately we made significant investments in people and property but subsequently suffered both from account losses and reduced spend from existing clients. Rapier is now on a strong financial footing and we have some incredibly talented people, a good continuing client base, and a supportive new partner in the CHI group.”
Johnny Hornby, chief executive of CHI and Partners Holdings, commented: “Jonathan is a great talent, and Rapier a great brand. We are excited to be supporting them and gaining access to his expertise and that of his team.”
UPDATE: According to Companies House data, Rapier’s pre-tax profits more than halved between 2009 and 2010 from £1.5m to £635,252 after the loss of Virgin Media and Lloyds TSB. The report, filed at the end of 2010, shows that Stead paid himself £2.9m, although he claims he has not taken a salary for the past two years.

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