Renewed force in a three-man army?

Last week troubled WTS and Rodney Fitch announced they were joining forces in what has been a secretive deal. Both parties talk to Lynda Relph-Knight about their visions through union

Rodney Fitch is tight-lipped – and loving it. Not so long ago, as chairman of publicly quoted consultancy Fitch, he had to reveal every detail of his business. But as Rodney Fitch & Company is a private company, now he doesn’t have to breathe a word, not even about the deal struck last Thursday with Wickens Tutt Southgate which gives him the majority stake in the brand design group.

So while he and WTS chairman Mark Wickens are both happy to talk of “a shared vision” and joint pitches for work in the Far East, neither will spill the beans on the actual content of the deal. And that means a conversation in which no figures are mentioned.

Fitch will concede, however, that his company, a retail specialist, has taken a “generous” stake in WTS and he assumes a place on its board. But the two consultancies remain separate in terms of premises, operations and the like – for now at least. The backbone of the deal is a shared vision that brings branding and retail design closer together and so, in theory, creates opportunities for both consultancies to work in tandem when appropriate.

There is no earn-out period and there are no time constraints on the investment. Nor has WTS any direct obligation to Rodney Fitch’s partner Virgin, which in turn owns 50 per cent of Fitch’s business. That link-up might lead to work for WTS – Rodney Fitch describes its role with Virgin as “brand development” and has created sub-brands such as Virgin Cola – but it will have to pitch for it like the rest. Certainly, the

Virgin stake in Rodney Fitch doesn’t stop either group working for rival companies – not even British Airways, according to Fitch.

It sounds so convivial that if you didn’t know different, you could take this for “a gentlemen’s agreement”, but as Fitch points out, “it’s made complicated by the law of tax”.

So what really lies behind the deal? For months speculation has been rife in the industry about WTS’s financial position. Indeed, the alarm first sounded in February, when Duncan Bruce quit as a director and WTS successfully fielded a wind-up petition by creditor Colourspace Connect. Mark Wickens and WTS chief executive Paul Southgate have consistently dampened rumours of disquiet as “repositioning” as the group lurched on from its packaging design roots towards what Southgate termed “brand realisation”.

Since then WTS has clung on to its vision of providing a different kind of service for branding clients – and taking on the ad boys by putting the brand centre stage. In a bid to achieve it, it’s courted all manner of prospective partners, despite Wickens’ denial that it was up for sale in August. MPL-owner Princedale, WPP Group, CLK, The Sandom Partnership – they’ve all sniffed around, along with a host of smaller creative services businesses.

WTS has insisted all along that it has been the coy one. “Paul and I have been looking for the right partner, and that takes a long time to find,” says Wickens, convinced that the deal with Fitch will yield greater influence with both branding and retail clients and give WTS the strong international base it lacks. “We need someone who’ll move us forward quicker,” he adds. “We’ve always been pioneers and were looking for someone to create a vision for clients that’s not based on old models.”

What he fails to mention is that WTS not only needed the right partner, but sizeable investment and strong management. And realisation of this has dampened the ardour of many a suitor.

Those who’ve been through WTS’s books as a prelude to a possible partnership tend to quote a cool 500 000 as what it could take to “sort out and reposition the business”. And on the management front there’s been a record of miscasting, particularly for the managing director role first held by Deborah Brasier-Creagh and most recently by John Owrid (officially deputy md), who quit 18 months ago. The post remains vacant as the search continues.

Founder partner Simon Rhind-Tutt quit in an amicable split four years ago, to pursue interests outside packaging and branding design. The Tutt Consultancy offers business skills and marketing consultancy to ad agencies, architects and design groups.

More recently, Bruce came in in September 1993, only to leave in February this year and eventually set up rival branding group The Gathering. His consultancy, based in Henley-on-Thames, has so far distinguished itself for killing off the Bisto Kids from the long-established gravy brand.

Add to these shifts concern by informed fans of WTS that it has lost its way, moving away from what it has been great at – packaging design – towards “brand realisation”, which demands a very different mix of staff and style of management – and you start to sense trouble.

So what’s in the deal with Fitch for WTS? On the business front, there’s the stability that comes of partnership with one of design’s elder statesmen and through him links with Richard Branson’s Virgin Group. We can only assume the cash deal provides what is required to move WTS forward and Fitch, a seasoned fighter, will be a positive force on the board.

And Rodney Fitch? Fitch himself refers to “vision”. “It’s a new vision about new retail, partly driven by technology and screen literacy and partly by retailers’ view of themselves as a brand,” he says, adding that “retailing has emerged as the cutting edge of brand development”.

What he’s getting in WTS is a brand, one of the few strong ones in UK design, and a partner which has won awards for its creativity. But industry pundits would also say he’s taking a big risk. A new report from accountant Willott Kingston Smith predicts a rise in mergers and acquisitions among creative groups (see News, page 4), but those who’ve been involved in such deals know it’s rarely easy bringing together two creative cultures, often led by headstrong individuals.

Fitch himself has ridden that storm before, having bought US product group RichardsonSmith in a 10.5m deal in 1988 when he was chairman of Fitch. You could say that deal, with its promise of cross-overs – this time from manufacturers to retailers – saved the publicly-quoted consultancy during recession as the bottom fell out of retail design, but product design stayed strong. Ironically, it was some of the personalities who came with the deal that orchestrated Rodney Fitch’s departure from Fitch in 1994.

But it’s different now. We’re not in recession and, by all accounts, business is booming for Rodney Fitch, especially in Asia. Wickens sums up the agenda: “It’s our number one priority to make this work.”

Wickens Tutt Southgate

1987 Set up as a breakaway from Michael Peters Group by Mark Wickens, Simon Rhind-Tutt and Paul Southgate

1992 Deborah Brasier-Creagh joins as md; Rhind-Tutt quits to go solo; the seminal Tango can is designed for Britvic

1993 WTS expands on the back of major BhS packaging contract; Duncan Bruce joins as a director

1994 Gossard Ultrabra packs bring fame; WTS opens Paris office and forms an alliance with Sterling Group in New York, launching the Worldbrand joint venture (neither worked out)

1996 Bruce quits and set up The Gathering; sale rumours are denied in August; Rodney Fitch & Company takes a major stake in November

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