Veteran advertising executive John Ford is to relaunch branching agency The One Centre, just 18 months after the company spectacularly collapsed with $3.4 million in debts and the sacking of about 24 staff.
Ford, who founded the business in 1999 and grew revenue to $12.5 million by 2008, purchased the company’s brand and intellectual property from administrators Grant Thornton in May and has secured the support of a private equity firm called The Adcock Group.
“We are in the processing of setting up. We are cashflow positive and I’m now in the process of gradually putting in other infrastructure,” Ford told SmartCompany today.
Ford says the business was hit with a “perfect storm” when it collapsed in April 2009, including a $1.25 million bad debt from Middle Eastern conglomerate Nakheel and a sharp downturn that tore through the advertising and marketing sector.
But he admits there were problems with the way the company’s financial, management and leaderships structures were set up.
Ford says the company has ploughed all profits back into growing the business, and while The One Centre had a good relationship with its bank, its capital base was simply not deep enough to withstand the downturn.
Ford also concedes he had put the hiring of a chief financial officer on the backburner, and this came back to haunt him when the bad debt problem emerged.
“It became a complete distraction for me dealing with that 24/7 issue. Even though there was a severe downturn I was unable to focus on any new business.”
Another problem was the management structure of the business, which was set up in what Ford describes as a matrix format, where the different departments of the business were connected with all the other parts.
That worked well when The One Centre worked on multi-discipline projects, but made downsizing difficult.
“When problems came it was like playing a game of Kerplunk to see what resources I could remove without decapitating the business.”
This time around, Ford plans to rely on finance and administrative support from The Adcock Group, at least for the first two or three years.
Ford will now start the process of reconnecting with former clients and hiring a team. The One Centre will bill itself as an arts and entertainment company, developing content such as graphic arts, digital arts, film and video, performing arts, photography and music.
Ford says he has two foundation clients, including an un-named company that he describes as a “top five global brand”.
The One Centre is in the process of developing a “platform” for the company that will involve an event and an on-going television series.
“The strategy is more of a push strategy than a pull strategy. If you do incredible, interesting things, people will come.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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