Papers will be served at Koan today as it commences the process of going into administration, but it will re-emerge in a fortnight as a virtual consultancy called Ethical Comms. Two staff have been made redundant.
Earlier this year Koan became the only Manchester business to be accepted as a member of the United Nations Global Compact.
They had trading of £1m per annum and were able to employ additional staff, but their work with the construction sector left them particularly exposed.
"It's a tough climate at the moment, as we know, and although the plan was always to develop the business in this direction there's no doubt that it has been quickened by the current economic crisis," managing director, Elaine Mitchel-Hill told us.
"These are difficult times for the industry and I would say that agencies need to make those uncomfortable decisions and take fast, decisive action to stay competitive, identify the unfolding opportunities and keep ahead of the game."
Of the "difficult times" we were told that the business had suffered from a bad debt of £40k and it recently lost a client in the construction sector.
Mitchel-Hill
It was after discussions with financial experts that directors made the decision to put Koan into administration and start trading as Ethical Comms on December 1st
"Ethical Comms is a more sophisticated business model capable of flexing with, and responding to, the changes in market conditions, shifting client demands and the ongoing economic uncertainties," added Mitchel-Hill.
"The team consists of highly versed, top-calibre consultants, all with proven direct experience in the fields of ethics, sustainability, values and social responsibility."
"The ability to adapt and transform is vitally important and now is the time for us to show our mettle. My aim is to ensure that not only do we get through these difficult times, but that we come out the other side on top and a clear leader in our field. The response from our clients has been one of excitement and support."
The virtual agency will mean that the company will work from "hubs" such as the CIPR office in London. We are told that their clients are likely to follow them from Koan to the new agency.
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