Cyrk (Company)

Cyrk, (NASDAQ: CYRK, symbol now defunct) at one time, one of the largest promotions companies in the world. Yahoo biz calls a "true tragedy", a company brought down by the actions of a single employee.

Contents

The rise

Founded in 1976 by Gregory Shlopak (1948-)[1], Cyrk started as a company that did screen-printing of customized clothing. The company went public in 1993 and the stock price hovered around $40 per share.

In 1997 the company, "already a significant player through its management of the Marlboro Gear and Pepsi Stuff continuity programs"[2] acquired Los Angeles-based Simon Marketing, making it one of the largest agencies in the promotion industry. They were named Agency of the Year by Promo Magazine in 1998. Although they lost the Pepsi Stuff account in 1998, they boasted McDonald's and Phillip Morris as their two top clients. They also did significant business with Beanie babies-maker Ty_Inc. McDonald's alone accounted for 61% of their revenue in 1999.

Although based in Gloucester, Massachusetts, the company's marketing-arm from 1994 to 1999, was a New York-based operation called Integrated Marketing Solutions, with President Laurel Rossi, who left the company in February 1999 to move to Hill Holliday Direct as executive VP and director of client services.[3] In 1999, they had $988M in sales. Shlopak resigned in 1999 to join Louis Marx in an investment firm Equity Enterprises (later Brae Capital). Patrick Brady, who had joined the company in 1989 and was, in 1999, already president, was named CEO. At the end of that year, Yucaipa Companies with a $25 million investment, became a substantial-enough owner to replace Patrick Brady as chairman with it's own Ronald Burkle. However Patrick and Simon CEO Allan Brown were named as "co-chief executives" of Cyrk.[4]

In Oct 2000, the company is described as consisting "...primarily of the Cyrk promotional products operation in Gloucester, the Los Angeles-based Simon Marketing...and a newly formed Internet division...."[5] In the Spring of 2001, Cyrk co-founder Patrick Brady, CFO Dominic Mammola and Exec VP Ted Axelrod, all resigned. In or around May 2001, the company split into two pieces. The Corporate Promotions Group was sold "once worth $147 million, for a mere $14 million to investment group Rockridge Partners, Inc."[6], an investor group led by Gemini Investors, LLC. and the Cyrk name along with that. "Bob Siemering, a principal with Rockridge Partners, was COO of Marketing Incentives", a company acquired by Cyrk in 1998.[7] Siemering became the CEO of the new company[8] The remainder of the company changed it's name to Simon Worldwide.[9]

The fall

The enormous reliance on income from McDonald's proved disasterously short-sited when McDonald's Monopoly Best Chance Game turned out to have been rigged fraudulently by Jerome P. Jacobson, the security officer at then-Cyrk-subsidiary Simon Marketing. Although arrests were announced Aug 22, 2001,[10] with convictions following, and only one Cyrk/Simon employee was charged, this did not stop McDonald's from voiding it's agreement. Phillip Morris quickly followed suit, thereby together removing more then 70% of Simon Worldwide's revenue.

The fallout severely hurt Simon Worldwide, and fourteen executives left to join Draft Worldwide in Chicago, part of the Interpublic Group, in forming a new unit, Premium Surge within their promotional marketing division Surge.[11] Although initially maintaining an amicable relationship, there were still several unresolved issues between Cyrk and Simon.[12] In May 2002, Simon Worldwide went into liquidation.[13]

The Massachusetts-based portion had evidently been sold.[14] On May 20, 2003, PPB Magazine reported that Gary Vonk replaced Bob Siemering as CEO of Cyrk.[15] In 2005, Cyrk, now based in Monroe, Washington appointed Alan Patrick as CEO.[16] They are now an "affiliate of Sun Capital Partners, Inc.[17] and the "entire Cyrk team" numbers less than 20 people.[18]

Meanwhile, Simon Worldwide is still traded as Template:OTC:SWWI.PK on pink sheets.[19]

Notes

  1. ^ Shuffle at Cyrk, Promo Magazine, Feb 1, 1999
  2. ^ Whither Cyrksimon, Promo Magazine, Oct 1, 2000
  3. ^ Promo Magazine, Mar 1, 1999
  4. ^ More than Money, Promo Magazine, Dec 1, 1999
  5. ^ Whither CyrkSimon, Promo Magazine, Oct 1, 2000
  6. ^ Two Industry Giants Stumbled Promo Magazine, Apr 1, 2002
  7. ^ Cyrk-Ulation, Corporatelogo.com, Jun 7, 2002
  8. ^ http://72.14.253.104/search?q=cache:P4l5yFi5DyEJ:www.cyrk.com/cyrk/newsroom_press.asp+%22Bob+siemering%22&hl=en&gl=us&ct=clnk&cd=4 CYRK Press Release], May, 2001, cached on google
  9. ^ CYRK 10-Q Filed 5/2001, Edgar-Online, SEC filings
  10. ^ FBI arrests 8, CNN Aug 22, 2001
  11. ^ New York Times, Nov 28, 2001
  12. ^ Unresolved Issues, March 2002
  13. ^ Cyrk/Simon Mind-Advertising.Com
  14. ^ sold Corporate Promotions Group in Feb 2001, Stateoftheindustry.com, 2002
  15. ^ Cyrk Names Vonk President, PPB Magazine, May 20, 2003
  16. ^ PPB Magazine, Feb 16, 2005
  17. ^ Affiliate
  18. ^ Entire Cyrk team picture
  19. ^ Biz.Yahoo on SWWI

Resources

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