Who Gave Love a Bad Name?

Falling out of Love is never a pleasant process, especially if your former partner – or indeed partners – are determined to inflict every iota of added injury they possibly can, with the incentive of their own pecuniary interest very much to the fore.

Now, I am not referring to any of my ill-advised trysts of yesteryear, but rather to events of a more recent hue. Let me take you back – and please supply your own shimmery dissolve here – to the events of November 2008 and the court case that saw Alistair Sim, founder and managing director of Love Creative, take the stand in Stockport Magistrates’ Court and plead guilty to assault.

The gravity of the situation saw Sim (right) immediately quit his role, a decision announced in a statement by Dave Palmer, a fellow director of the agency, thusly: “We were aware that Alistair was having some personal problems, but the severity of the situation has meant that his position has become untenable at Love. It was Alistair’s decision to step down, and under the circumstances it was the right decision to make.

"Undoubtedly, this is an extremely traumatic time for Alistair and his family, and, although we cannot condone his actions in any way, we are very sympathetic to all involved. Alistair hasn’t been involved in the day-to-day running and strategic direction of client accounts for some time, and his departure, will have no impact in this area."

As it turned out, Palmer and his associates had a strange way of being “very sympathetic to all concerned”, but we’ll come back to that in due course. First let’s take a look at the court case itself, which saw both the chief reporter of the Manchester Evening News and, unusually, a photographer sat on the press benches. Now, whereas I can just believe that even the dwindling resources of the MEN might have stretched to providing a reporter for this case, I find it very hard to accept that their antennae were so finely tuned as to be aware of it. This does beg the question – “Who tipped them off?” With the obvious answer being – “Whoever had the most to gain.”

Draw your own conclusions, sympathetically, of course. Or perhaps ask Phil Skegg (left), who has several mates who are journos on the MEN, sufficiently close mates to reveal the contents of the article prior to its publication. Skegg was one of the few, including Sim, his immediate family, his estranged partner and Palmer, to know the scheduling and details of the case. It is possible that the hearing was picked up solely on the basis of the court listings, but it is unlikely.

Farewell to the Dream Team
Sim’s departure from the business was immediate and abrupt, although there was a tacit understanding that he might return once everything blew over. The unwritten nature of this agreement was one that was to prove costly to Sim over the next 18 months. It wasn’t only Sim that suffered though, Love itself has become a shadow of the once-all-conquering mini-creative behemoth, which won the admiration (albeit grudgingly) of even rival agencies. Surprisingly, though, its reputation has suffered considerably less than that of Mr Sim.

Since Alistair’s departure at the end of 2008, at least 14 members of staff have quit the company (for completists that’s Richard Hall, Cheryl Borkin, Adam Rix, Simon Griffin, Rory Sutherland, Leanda Falcon, Jonny Whiteoak, Jono Brain, Ben Taylor, Adam Forthergill, Shelley Wood, Harinder Bajwa and Gre Hale). This follows on from the six who left in the three months prior to his departure (Jonathan Rigby, Andy O'Dwyer, Alison Johnson, Jon Hatton, Frank Carolan and Rob Brearley).

Add into this the earlier departure of co-founder Dave Simpson and Matt Beardsell to launch Music in January 2008 and it brings the total no of departures (including Sim himself and the company’s first ever redundancies) since Love moved from Tib Street to High Street in 2006 to a whopping 24. (To put this into perspective, rival NW design outfit, True North, lost four members of staff during the same period. True North employs 16, Love fluctuates around 30, so even doubling the TN figure to take account for this still sees Love losing three times as many staff).

Essentially, of the Dream Team that built Love’s reputation during its first eight years of existence, only Phil Skegg (now chairman) and Dave Palmer (executive creative director) remain. The relative youth and inexperience of the Dream Team’s replacements has been reflected in the agency’s lacklustre performance in terms of new business and awards, sectors where they were once unassailable, at least in NW terms.

Awards and New Business Wasteland
Where, at one time, the agency took the chairman’s award at the Roses, regularly picked up Design Week awards and pretty much swept the board at Fresh, 2009 was a disaster for the agency – nothing at all in Design Week, a couple of bronzes and silvers at the Roses and just two awards at Fresh – down from 14 the previous year. It was, without a doubt, the company’s worst ever year for awards.
2010 is shaping up to be a little better with a bronze in low budget, and a gold for illustration at the Roses – neither in categories the agency will be rejoicing over. Obviously, they’re not advertising with the Carnyx group as much as they used to.

A lean time for awards then, though it’s a comparatively rosy result compared to the company’s new business performance. Unlike a lot of other NW design companies – True North, Dinosaur, The Chase etc – Love has always been primarily project-oriented. This was fine when Sim was constantly shovelling in new business, but once the pipeline was cut, the agency faced a huge problem in meeting its considerable overheads. The problem has been compounded by the loss of work from Microsoft, the Student Travel Association, All About Food (the parent company of Nandos’ source of sauces) and its removal from the BBC roster.

The agency may also be regretting the largesse that saw it give away accounts to breakaway start-up, Music, including work for Manchester City, the Manchester International Festival, Christian Aid and the furniture manufacturer, Allermuir. It’s not all bad news though as chairman Skegg is believed to maintain an interest in the start-up, a lifeboat in waiting the cynical might say.

In truth the agency is now completely reliant on work from just two clients – Sony and Umbro, although the margins on the latter are believed to be particularly low. Some reports even suggest that Paul Chorlton, the company’s financial director, personally bailed out the business with his own funds and money from Life PR, the Ducie Street-based business he is part owner of.

It’s not all been gloom for Love though. Back in January 2009, Sarah Murray joined the company as head of new business and, just six months later, presumably after a record-breaking whirlwind romance, she was married (above) to Stephen Corlett, one of the senior marketing team at Umbro. With Corlett (Mr) now believed to be heading off to the States, it might be time for other NW design consultancies to send their most comely single account directors Cheadlewards.

The Shafting Begins
Perhaps the company’s failures on the staff and client retention, awards and new business fronts may be explained away by the fact that the attention of its remaining directors was elsewhere – largely on shafting its former MD. Much of the creativity and innovation of Messrs Skegg, Chorlton and Palmer, since November 2008, has gone into ensuring that Sim received the minimum possible payout for his shareholding in the business he built.

Under the auspices of its three directors, Love delayed posting its 2009 accounts for as long as possible. When they eventually submitted them they recorded £255k of accrued/deferred income in comparison to just £80k in the previous year (the majority of it, apparently, down to their nuptial connections at Umbro). In effect, the company deliberately held back on registering accrued income until after a compulsory sales transfer notice was served on Sim in August 2009. This allowed them to post a big loss and considerably undervalue the company.

Despite his resignation – and largely because of the outstanding issue regarding the shares – Sim had remained a director of Love until April 2009. Without his consent, however, the remaining directors had cancelled the shareholders’ dividends as of January 2009, effectively stripping Sim and his family of any income at all. So much for being “sympathetic” to all involved.

These January moves also saw the remaining management of Love renege on earlier promises that Sim would have the option of returning to the business and taking up a role in one of the company’s subsidiaries – either Toy or Make. It also saw the company officially decline to pay Sim any notice pay, potentially resulting in financial disaster for its ex-MD.

This was a very different picture to that painted by those same directors when the MEN initially broke the story back in November 2008. Back then, the directors, all mock sympathy and concern, had turned up at Sim’s house with promises to make sure he and his kids didn’t suffer, telling him he could keep his shares and that they’d carry on paying him till it all blew over.

Nothing was put in writing about this meeting but I, like a number of other figures in the industry, was in regular contact with Sim at the time and was well aware of what he had been promised and his expectation to eventually return to the business.

Dismissal Missives
Sim’s first inkling that these promises were unlikely to be kept came in a series of letters from Paul Chorlton, Love’s financial director, demanding his “official” resignation and cutting his notice period from six months to three. When Sim queried this and referred to the earlier agreement, he received a letter, just before Christmas 2008, announcing Love was initiating a dismissal procedure against him. He was eventually sacked in January 2009. At the same time the company suspended the shareholders’ dividends, whilst increasing the salaries of the remaining directors as “compensation”.

No transfer of shares was initiated until August 2009 when Sim’s 33% share in the business he had spent eight years building was valued at just £240 – largely due to the financial chicanery of FD Chorlton and co. To this day, Sim has no idea who has taken over his stake in the business and those details have yet to be recorded at Companies House, although this is a legal requirement in such a transaction. Sim still retains his original share certificate which he has understandably declined to return.

The low valuation put on the business by the triumvirate of remaining directors in August 2009 is quite at odds with the picture they painted in April of that year, when they were in negotiations with Hasgrove (parent company of the Chase, Amaze et al) about selling the business. Then they produced figures showing that Love was making £15k profit a month and valued the business at some £2 million. In the end, the deal foundered when Palmer unilaterally stopped attending meetings with Hasgrove and announced, without putting it to a vote with the other shareholders, that the deal was off.

Love for Sale
The negotiations between Love and Hasgrove were proceeding even as Sim finalized his own deal to join The Chase as business development director, a move that was announced at the end of May 2009. Had the Hasgrove/Love deal gone through, it would have seen Sim reunited with the team he had largely built up and, perhaps, resulted in a financial and creative renaissance for Love. Sadly, it was not to be.

On the brink of a financial crisis, Sim had little alternative but to rescind his resignation and take his former company to an employment tribunal for unfair dismissal. It is here that the waters become very muddied indeed. As part of the proceedings, Sim maintained that he had long understood – ever since the November 2008 meeting – that the directors had assured his eventual return to the business. Although many ex and current members of staff at Love also recall just such assurances about Sim’s future being made to them, the directors felt free to tell the court that this was not the case. I’m sure there’s a legal term for this.

Neither did the tribunal take into account the fact that Chris Conlan, Love’s new MD, had emailed Sim, prior to his own elevation, and told him: “All our clients and staff are supporting you and are sure you will bounce back from this.”

Chorlton (right, sans foil), Skegg and Palmer even went as far as to bring back short-lived joint MD Richard Hall (sacked several months earlier for trying to install an entirely inappropriate “Hitlerite” regime at Love’s High St offices) to ‘stick the boot’ into Sim.

Bizarrely, the legal discussion moved from whether Sim actually had brought Love into disrepute to whether he could have done by staying. It could well be argued that a truer picture would have been that, in fact, it was Sim’s departure that ultimately led to a number of staff decamping, creative standards falling and clients moving their business elsewhere.

The company offered little evidence that any client made representations about potentially moving their business in the light of Sim’s actions, but still ruled they might have done had he stayed. The one area focussed on by the tribunal was the negative publicity generated by the press coverage of Sim’s trial and sentencing.

It is impossible not to wonder if the tribunal would have been quite so sympathetic to Love had they known the role of at least two of the directors in orchestrating that negative press coverage. As well as flagging up the original court case, both the MEN and, resulting in a rare trip South of the Border, even the Drum were briefed to attend the two tribunals. How-do, which had been far more impartial in its coverage, received no such briefing.

Despite reports from normally reliable media sources and The Drum, Love did not get it all it own way, with the tribunal ruling that the company should indeed have honoured Sim’s notice payments, amounting to some 50k. To date, they have still singularly failed to meet this obligation, even six months on from the tribunal.

The End of the Affair...
Unfortunately for Sim, his months of unemployment and continuing financial commitments to his family, left him without the funds to take the matter further and challenge the valuation presented by his former colleagues Nor could he afford to take issue with the unilateral share transfer.

Following the tribunal, the information provided by Love’s financial director ensured that the company was deemed insolvent by its auditors. In order to maintain this fiction, the deferred amounts in the end-of-year accounts were continually pushed back, first to September then finally into October. Technically, during this period, the company should have gone into administration. The pressures of maintaining this distorted picture of the business and of rewriting history around the promises made to Sim prior to his resignation proved too much for some members of staff.

In the end, after eight years building the business and several months in the wilderness, Sim received nothing at from Love, whilst people who had contributed far less gave themselves pay rises and continued to kick him when he was very much down. Ultimately, it was not Sim who brought Love into disrepute.

This article is obviously one-sided, something for which I make no apology. The coverage to date – with the honourable exception of how-do, which has demonstrated a fair degree of impartiality – has been equally one-sided, albeit skewed entirely in favour of Love. This was epitomised by the ever-gutless Drum, who have seemed almost entirely in the pocket of Love – going as far at one point as to run an on-line poll asking: “Should Alastair Sim ever be allowed to work in the industry again?” They then compounded the offence by sending Alistair a whiny e-mail complaining that he had given How-do an exclusive interview but had declined to speak to them. Now why do you think that was you cottage industry clowns?

Some 18 months on from the assault that Sim himself has called his “Bonfire of the Vanities” moment, we are left with two damaged brands. Sim’s own brand, once highly-regarded in the North West and beyond, has suffered as a result of one moment of madness. The Love brand, itself, has been undermined by 18 months of mendacity, duplicity, greed, schadenfreude, incompetence, egotism and short-sightedness.

I know which one is most likely to recover.