LONDON — First it was brands collapsing — now, it’s the fashion PR companies.
The magic didn’t last long at ScienceMagic.Inc, the communications agency cofounded by Daniel Marks, Julietta Dexter and David Pemsel, current chair of the British Fashion Council. Three years after its founding, the company has gone into voluntary liquidation, a self-imposed windup that has been approved by shareholders.
In a statement shared with WWD, the company said: “As with so many businesses, securing investment in the current economic environment, the increasingly vulnerable global economic and political landscape, current market conditions, sector challenges, and increasing business costs all contributed to the decision taken by its directors to liquidate the business.”
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According to accounts filed at Companies House in the U.K., ScienceMagic has been hemorrhaging money since its inception. It registered a loss of more than 2 million pounds in 2020 and lost another quarter of a million pounds in 2021. No accounts have been filed for 2022.
As reported, ScienceMagic.Inc was formed in 2020 as a new-generation public relations, branding and marketing company that wanted to connect the dots between data science, storytelling and digital technology, and speak to the next generation of consumers and shopping tribes.
It was built on the foundation of The Communications Store, or TCS, which had been in business for more than 25 years with clients including Versace, Victoria Beckham Beauty and Goop.
TCS had been one of the top PR firms in fashion with a large roster of clients in the U.K., Europe and the U.S. Marks and Dexter brought Pemsel in and renamed the company in 2020.
As reported, Marks parted ways with ScienceMagic.Inc more than a year ago and now runs his own business, Townhouse Consultancy Ltd., representing a small group of high-profile, creative entrepreneurs, such as Donatella Versace on communications strategy and global profile building.
A source who works at a competitor alleged ScienceMagic.Inc “stopped doing the bread and butter work. We took clients from them who said they simply could not land coverage.”
ScienceMagic.Inc acknowledged in the Companies House filings that there was ongoing uncertainty with regard to the performance of a number of its clients which, in turn, would affect the company’s future operations.
Like many companies, it also took advantage of government support schemes during lockdown, such as furlough, time to pay arrangements, a coronavirus business interruption loan and a recovery scheme loan.
In 2021, ScienceMagic had anticipated a return to growth in the 2022 financial year. The directors said they believed that the company had adequate resources to continue operating for the foreseeable future.
The firm is the latest British fashion-related business to go under, as many struggle to keep businesses afloat in the wake of the pandemic. Earlier this year, The Vampire’s Wife, La Perla, Christopher Kane and Julien Macdonald all faced various debt crises that threatened the future of their businesses.
According to U.K. government statistics, the number of company insolvencies in the second quarter was the highest since the corresponding period in 2009, in the wake of the global financial crisis. Insolvencies in the second quarter were also 13 percent higher than in the corresponding period last year.
Things are only going to get worse, according to Marco Piacquadio, head of the insolvency practitioners FTS Recovery, which assisted the Christopher Kane and Julien Macdonald businesses.
“It’s a pretty nasty set of circumstances to be surviving against, and I think that in the last nine to 12 months we’ve started to see a trend that will likely continue in the next two to three years, at least. I think the insolvency numbers are going to continue for quite a sustained period of time. It’s going to get more painful before it gets any better,” he told WWD in an interview over the summer.