GRIMAX ADVERTISING Limited, one of Jamaica's oldest agencies, ceased operating on June 1 this year, citing its own financial difficulties and that of its clientele.
But yesterday, the owners insisted that the closure was by no means permanent.
The agency has found itself in a new environment following the collapse of many legitimate businesses in Jamaica, including many of Grimax clients, said Tricia Grindley in a press release. Ms. Grindley is the daughter of Grimax chairman and managing director, Gerry Grindley.
"You can term this a temporary closure in the sense that we will be back," Ms. Grindley told Wednesday Business. "We just need to take a strategic break."
Grimax will be liquidating its assets, all real estate and other holdings, to try to satisfy any remaining obligations. Simultaneously, efforts to collect outstanding monies is ongoing.
'INTEREST DEBT'
"We regret having to take this action, but too much money was leaving the agency to cover expenses and pay "interest debt" while income, although improving over the last two years, was not increasing enough to keep the company cash strong," Ms. Grindley stated in the release.
"We also found ourselves in a situation where some establishments either refused to deem our services billable or slashed their budgets drastically mid-campaign," she stated. "This trend placed us under tremendous financial pressure and the cycle caught up with our ability to keep the business running." Given the realities of Jamaica's competitive economy, the charges at many established agencies are regarded as being high, adds Howard Moo Young, director of Howard Moo Young & Associates, an advertising and graphic design firm.
ADJUSTING
The sector is trying to adjust to the fact that many advertisers are increasingly being tempted to use the services of freelancers and some are now performing advertising agency services in-house.
"Some young people have left agencies and gone on their own. There are more firms in the industry now, but they are going after the same clients, said Mr. Moo Young. "It is a dog-eat-dog business."
Ms. Grindley said: "I think the Advertising Agencies Association has been lax as it relates to the future of advertising. We should have been planning for these trends."
The industry should have put up defences against the present fragmentation, she said. "A lot of firms are having a hard time just trying to decide what do we do now."
Terry Williams, vice-president of the Advertising Agencies Association of Jamaica (AAAJ) said however that the Jamaican economy was going through a transformation. While Grimax is closing, new agencies are also emerging.
The Grimax closure "is no indication of an industry which is not growing," Ms. Williams said. "It is part of the dynamics of what is happening now."
Grimax should be operational again by January next year, Ms. Grindley said. "It is definitely going to be along similar lines, and it will definitely involve partnerships."
