Maurice and Charles Saatchi, who created and then were kicked out of the world's biggest advertising company, are trying to revive defunct brands as their latest venture.
When Saatchi & Saatchi Co Plc dominated advertising in the 1980s, the brothers were better known for working with household names such as British Airways Plc and the UK's Conservative Party. Soaring debt resulting from a global spending spree led to their expulsion from the firm -- and the loss of their own brand name, Saatchi & Saatchi.
The brothers are betting on products such as Complan, a health drink, and Casilan, a protein supplement, bought from H.J. Heinz Co. The venture, Saatchinvest, will own the rights to the brand names and plans to boost their value through marketing.
Heinz will continue to manufacture the products, and the two companies will split the revenue.
"It's a type of venture capita-lism," said Jeremy Bullmore, a former chairman of the advertising agency J. Walter Thompson UK.
"Smaller brands tend to be neglected and become orphans."
Consumer-product companies are cutting back on unprofitable brands as stalling economic growth crimps spending. Unilever Plc is eliminating 1,200 lines in the next five years, including Elizabeth Arden makeup and Mazola oils, to focus on its 400 best-selling labels. Procter & Gamble Co has sold Jif peanut butter and Crisco cooking oil.
Some analysts are skeptical whether the Saatchis have the resources to succeed where companies such as Heinz have failed.
"Repositioning is not an easy task," said Robert Jan Vos, an analyst at ING Financial Markets, who covers Unilever. "It's a challenge even for companies like Unilever with sales and marketing channels, and certainly a challenge for an ad agency." Maurice and Charles Saatchi, who declined to be interviewed, are no strangers to rebuilding businesses -- including their own.
They have created a company with 600 employees, M&C Saatchi, since their ouster from Saatchi & Saatchi in 1994. The firm had revenue of ?210 million (US$333 million) in the year ended September 2002, compared with ?257 million for Saatchi & Saatchi in the UK, according to Nielsen Media Research.
While M&C Saatchi ranks 36th worldwide among advertising agencies, according to Ad Age magazine, that's still well below Saatchi & Saatchi's No. 1 position in the 1980s.
The latest venture will work with a ?50 million budget, hoping to emulate rebranding successes such as Lucozade.
Saatchinvest will get 51 percent of the brands' revenue, Heinz will get 34 percent, and managers will take the remaining 15 percent. Heinz and Saatchinvest declined to disclose sales.
Maurice and Charles, sons of Jewish immigrants from Iraq, rose to fame in the late 1970s and early 1980s with campaigns that included promoting British Airways as "the world's favorite airline." The BA campaign began in April 1983. Earnings rose in the following three years, paving the way for the sale of the airline by the government in 1987.
In 1979, an election poster the Saatchis designed titled "Labour Isn't Working," which showed serpentine queues at an unemployment office, helped bring Margaret Thatcher to power.
Campaign, a marketing-and-advertising industry magazine, judged it "poster of the century" in 1999.
The brothers tried to turn Saatchi & Saatchi into a broader-based provider of corporate services, buying consultants and unsuccessfully bidding for Midland Bank. They were ousted following a dispute over compensation and debt.
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