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Tuesday, 20 June, 2000, 18:41 GMT 19:41 UK
Saatchi's colourful history
Labour isn't working poster
The poster which made Saatchi's name
Saatchi & Saatchi has been the most colourful name in the UK advertising industry for the best part of two decades.

It first came to mass prominence as the agency which sold Margaret Thatcher's Conservative Party to the British people in 1979.

The advert in question, entitled Labour isn't Working, has become the benchmark for all political advertising and became synonymous with the Saatchi & Saatchi name.

During its glory days in the 1980s it grew at a rapid rate to become the world's largest advertising firm.

It became indelibly linked with the excesses of the 1980s boom when it launched an audacious bid to take over one of Britain's biggest banks, the Midland.

Speedy growth

The flamboyant Saatchi brothers, Maurice and Charles set up the business in the early 1970s and during the growth years gave the company a distinctive edge over competitors.

With their close association to the then Prime Minister and a host of high-society names, the brothers led the agency on a whirlwind buying spree.

But the speed of their growth created the conditions for their own downfall, as the task of absorbing the new companies became ever more difficult.

The bust, which followed the late 80s boom, exposed gaping debts at the agency, hitting the company's share price hard.

Frenchman Robert Louis-Dreyfus was appointed to turn around the ailing group. He largely succeeded and has since gone on to further glory as the chairman of Adidas sportswear group.

Rival firm

It was five years ago, when their role was largely marginal, that the Saatchi brothers finally left the company.

Maurice convinced some top executives and some leading clients, notably British Airways, to leave with him and set up a competing agency.

He was joined by the creative force behind his former company, brother Charles.

The brothers still run M and C Saatchi agency, which retains BA and a number of other high-profile British clients.

In 1995 the restructured group had been pooled with US merger partner Bates Worldwide and renamed Cordiant.

It was demerged from Cordiant in December 1997 with the Saatchi and Saatchi name since remaining high profile, if no longer the biggest in the industry.

Damien Hirst

Saatchis increasingly focused on the US, where it now gets nearly three quarters of its operating profits.

Its biggest clients include Proctor and Gamble, Toyota Motor Cars, DuPont and Sony.

The merger will create the world's fifth largest agency, by bringing together the world's 10th largest, Publicis, with the world's 12th biggest.

The new French owners say they will continue to use the Saatchi name, one which is one of the best known in late 20th Century UK business as a whole.

As to the brothers who founded it, Maurice is the Conservative Party treasury spokesman in the House of Lords, while Charles has become well known as a patron of the arts, with his Saatchi Gallery emerging as the cradle of young British artists such as Damien Hirst.

Saatchi and Saatchi earned pre-tax profits of 38.6m ($58m) on sales of 400m last year.

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20 Jun 00 | Business
Saatchi falls to Publicis
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