Why is CHI playing fairy godmother to Jonathan Stead and the rump of failed UK agency Rapier?

We all know that CHI boss Johnny Hornby is a nice chap, but he’s also one with a bottom line to look after – Sir Martin Sorrell’s WPP is a 49 per cent shareholder.

So why on earth has he ridden to the rescue of Rapier boss Jonathan Stead (left) and the remains of his bust agency Rapier?

CHI is setting up a new venture with Stead with will keep the Rapier name. Some staff will keep their jobs and some clients will be still be serviced – chiefly Vodafone it seems as most of the others, like Virgin Media, Yell (practically bust itself) and RAC have departed over the past couple of years. Hence Rapier’s demise.

But CHI’s biggest client is TalkTalk, Carphone Warehouse founder Charles Dunstone’s mobile business (which has a few problems, most notably customer service, itself). TalkTalk competes with Vodafone in the UK of course. Maybe Vodafone’s planning to buy it and Hornby, a big mate of Dunstone, is playing a deep game.

If he isn’t it all looks rather bizarre. Especially as one of the reasons Rapier foundered was that Stead, according to my friend Bob Willott of Financial Services Marketing Intelligence extracted £2.9m from the company when partner john Townshend left over a year ago. This can’t have helped Rapier’s survival chances, nor Townshend who, again according to Bob, is still owed £500,000 for shares which were valued at £1m when he left. You don’t need to be an accountant to realise that they’re not worth that any more.

Townshend clearly has (had?) some gifts as an entrepreneur and brand builder but they seem rather overshadowed by his management limitations. Of which we probably haven’t heard the last as Townshend, presumably, will be consulting his lawyers.

All up it seems a risky move for CHI to make without any obvious prospect of reward.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.