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_____________________[PRO] дизайн накрывается медным тазом

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The design industry is suffering from a colossal drop in confidence, as the turnround that was hoped for has failed to materialise and further tough times are widely expected.



Size matters
Clare Dowdy
FT.com site; Sep 09, 2002


The design industry is suffering from a colossal drop in confidence, as the turnround that was hoped for has failed to materialise and further tough times are widely expected.

The latest quarterly design survey from management consultants David Jebb Associates shows the balance of optimism among respondents fell by 35 per cent between the first and second quarters of this year, bringing it back down to the very low levels seen at the end of 2001. Jebb's survey, which takes in more than 50 design groups, from the very small to the big names, claims a 90 per cent accuracy rate.

A dearth of big brand projects, clients tightening budgets and taking much longer to make decisions, and a falling-off of repeat business are all contributing to the gloom. According to Jebb, average operating profit as a percentage of gross income fell 50 per cent in the second quarter from 16 per cent to 8, and average annual profit per employee fell by half, from ý10,900 to ý5,500.

However, there is a marked difference between the performance of big and small companies, with Wolff-Olins the latest large group to announce job losses. Jebb puts this contrast down to repeat business. 'Companies that rely each year on a high percentage of new business have been inclined to suffer much more than those consultancies where a substantial amount of each year's business comes from existing clients'. So, big consultancies which are used to handling one-off branding projects are less suited to this climate.

This is borne out by the experience of 12-strong graphics group, Sea, 70-80 per cent of whose work is repeat business. So far, the five-year-old agency has beaten its fee income targets by up to 15 per cent for each month this year. 'It will be one of the best years weve had if the last quarter goes well,' says co-founder Bryan Edmondson.

Meanwhile, some consultancies in the retail sector are also bucking the trend. Retail design group 20/20 is recruiting, while its profitability is static. Its performance is also helped by repeat business, according to managing director Rune Gustafson, who says that 90 per cent of its work comes from existing clients or known people, rather than new introductions.

It is the agencies that relied on large branding jobs that are hurting the most, and the bigger the agency, the more desperate the situation is likely to be. Venture 3, which was set up as a spin-off from Wolff-Olins three years ago to take on one or two big branding projects a year, is changing the shape of its team for what lies ahead. As fewer major branding jobs are coming through the door, the consultancy is reconfiguring to take on the 'slices and crumbs' of branding projects currently on offer. With only 18 people, it's easier for Venture 3 to adapt quickly than its bigger peers, says principal Philip Orwell.

Jebb himself declines to make predictions for the industrys recovery, saying only that he expects 'continuing uncertainty'.

clare.dowdy@ft.com

design_industry
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