One of Dublin's oldest advertising agencies, Doherty Advertising, ceased trading yesterday evening with debts estimated at several million euros.
Staff were told shortly after 5 p.m. that the company was closing with immediate effect and that a receiver was being sought.
Doherty employed 36 staff and counted some of the Republic's largest hospitals and local authorities as clients. It owes money to a number of creditors, including several major media companies.
In a brief statement, the board said it had "no alternative but to cease trading" and has asked its banker, Ulster Bank, to appoint a receiver. It is understood the bank is also a major creditor, owed well in excess of €1 million.
Doherty's demise, although sudden in the end, is not a surprise. Attempts to stave off mounting debts by attracting fresh investment foundered this week when rivals the Larkin Partnership abandoned a takeover after completing due diligence and Japanese advertising house Hakuhodo ruled out a partnership.
Doherty chairman Mr Paschal Taggart said he would not comment on yesterday's events. Other senior members of the company could not be contacted.
An Ulster Bank spokesman said the bank learned of Doherty's closure shortly before the end of business yesterday and had not yet appointed a receiver.
Established in 1963, Doherty was taken over in 2001 by Mr Mark Beggs and Mr Antony Martin of internet service provider company Indigo.
Long considered one of Dublin's heavyweight advertising players , it was the fourth-biggest spender in the Republic last year, placing €7.9 million of ads. It is best known as the agency behind the Brennan's "Today's bread today" and Shaws "Almost nationwide" slogans.
Accounts to April 30th, 2002 show pre-tax profits dropping to €534,618 from €797,753. While turnover rose, the firm's administrative expenses rose to €3.8 million from €2.6 million. But healthy cashflow was offset by a debt burden that eventually became unmanageable.
Doherty is the most high-profile casualty of the downturn that has gripped the advertising industry over the past three years. Several prominent clients departed over the past 12 months, among them the Eastern Regional Health Authority, Boyle Sports and Suzuki, although it gained electrical company Bosch.
Other clients listed on Doherty's website include Tallaght, Beaumont and Mater hospitals, Dún Laoghaire, Rathdown, Louth, Wicklow and Clare councils and the Dublin Simon Community. Doherty also offered a public relations service to clients.
The collapse last month of short-lived Dublin Daily newspaper hit the business hard. Managing director Mr Mark Beggs said the title's demise cost Doherty €300,000.
The severity of the advertising slump was underscored this week when one of Doherty's major competitors, Brindley Advertising, reported an 18 per cent fall in turnover, with pre-tax profits down by almost a third for 2002.
