Cyrk (Company)

Cyrk was once one of the largest promotions companies in the world. The company's stock was listed on NASDAQ under the ticker symbol CYRK. Yahoo biz calls a "true tragedy", a company brought down by the actions of a single employee.

The rise

Founded in 1976 by Gregory Shlopak (1948-) [ [http://promomagazine.com/agencies/marketing_agencies_whos_news_2/ Shuffle at Cyrk] , "Promo Magazine", Feb 1, 1999] and Paul Butman (1949-) [ [http://sec.edgar-online.com/2000/03/28/17/0000950135-00-001701/Section19.asp Simon Worldwide, Form 10-K, Filing Date:3/28/2000] ] , Cyrk started as a company that did screen-printing of customized clothing. The company went public in 1993 and the stock price hovered around $40 per share.

In 1997 the company, "already a significant player through its management of the Marlboro Gear and Pepsi Stuff continuity programs" [ [http://promomagazine.com/agencies/marketing_whither_cyrksimon/ Whither Cyrksimon] , "Promo Magazine", Oct 1, 2000] acquired Los Angeles-based Simon Marketing, making it one of the largest agencies in the promotion industry. They were named "Agency of the Year" by "Promo Magazine" in 1998. Although they lost the Pepsi Stuff account in 1998, they boasted McDonald's and Phillip Morris as their two top clients. They also did significant business with Beanie Babies-maker Ty Inc. McDonald's alone accounted for 61% of their revenue in 1999.

Although based in Gloucester, Massachusetts, the company's marketing-arm from 1994 to 1999, was a New York-based operation called Integrated Marketing Solutions, with President Laurel Rossi, who left the company in February 1999 to move to Hill Holliday Direct as executive VP and director of client services. [ [http://promomagazine.com/agencies/marketing_agencies_whos_news/ "Promo Magazine", Mar 1, 1999] ] In 1999, they had $988M in sales. Shlopak resigned in 1999 to join Louis Marx in an investment firm Equity Enterprises (later Brae Capital). Patrick Brady, who had joined the company in 1989 and was, in 1999, already president, was named CEO. At the end of that year, Yucaipa Companies with a $25 million investment, became a substantial-enough owner to replace Patrick Brady as chairman with its own Ronald Burkle. However Patrick and Simon CEO Allan Brown were named as "co-chief executives" of Cyrk. [ [http://promomagazine.com/mag/marketing_money_new_investor/index.html More than Money] , "Promo Magazine", Dec 1, 1999]

In Oct 2000, the company is described as consisting "...primarily of the Cyrk promotional products operation in Gloucester, the Los Angeles-based Simon Marketing...and a newly formed Internet division...." [ [http://promomagazine.com/agencies/marketing_whither_cyrksimon/ Whither CyrkSimon] , "Promo Magazine", Oct 1, 2000] In the Spring of 2001, Cyrk co-founder Patrick Brady, CFO Dominic Mammola and Exec VP Ted Axelrod, all resigned. In or around May 2001, the company split into two pieces. The Corporate Promotions Group was sold "once worth $147 million, for a mere $14 million to investment group Rockridge Partners, Inc." [ [http://promomagazine.com/incentives/marketing_premium_incentives_holding/ Two Industry Giants Stumbled] "Promo Magazine", Apr 1, 2002] , an investor group led by Gemini Investors, LLC. and the Cyrk name along with that. "Bob Siemering, a principal with Rockridge Partners, was COO of Marketing Incentives", a company acquired by Cyrk in 1998. [ [http://cache.zoominfo.com/cachedpage/?archive_id=0&page_id=291075957&page_url=%2f%2fwww.corporatelogo.com%2farticles%2f131feat1.html&page_last_updated=6%2f7%2f2002+9%3a10%3a23+AM&firstName=Bob&lastName=Siemering Cyrk-Ulation] , Corporatelogo.com, Jun 7, 2002] Siemering became the CEO of the new company [ [http://72.14.253.104/search?q=cache:P4l5yFi5DyEJ:www.cyrk.com/cyrk/newsroom_press.asp+%22Bob+siemering%22&hl=en&gl=us&ct=clnk&cd=4 CYRK Press Release] , May, 2001, cached on Google] The remainder of the company changed its name to Simon Worldwide. [ [http://sec.edgar-online.com/2001/05/10/0000950135-01-501100/Section7.asp CYRK 10-Q Filed 5/2001] , Edgar-Online, SEC filings]

The fall

The enormous reliance on income from McDonald's proved disastrously short-sighted when McDonald's Monopoly Best Chance Game turned out to have been rigged fraudulently by Jerome P. Jacobson, the security officer at then-Cyrk-subsidiary Simon Marketing. Although arrests were announced on 22nd of August 2001, [ [http://archives.cnn.com/2001/LAW/08/21/monopoly.arrests/index.html FBI arrests 8] , CNN Aug 22, 2001] with convictions following, and only one Cyrk/Simon employee was charged, this did not stop McDonald's from voiding its agreement. Phillip Morris quickly followed suit, thereby together removing more than 70% of Simon Worldwide's revenue.

The fallout severely hurt Simon Worldwide, Ronald Burkle resigned from the board, and fourteen executives left to join Draft Worldwide (now called Draft FCB Group) in Chicago, part of the Interpublic Group, in forming a new unit, Premium Surge within their promotional marketing division Surge. ["New York Times", Nov 28, 2001] Although initially maintaining an amicable relationship, there were still several unresolved issues between Cyrk and Simon. [ [http://library.consusgroup.com/library_pvw/337/337081.asp Unresolved Issues] , March 2002] In May 2002, Simon Worldwide went into liquidation. [ [http://www.mind-advertising.com/files/files/cyrk_us_p.htm Cyrk/Simon] Mind-Advertising.Com]

The Massachusetts-based portion had evidently been sold. [ [http://www.stateoftheindustry.com/2002/distributors.asp sold Corporate Promotions Group in Feb 2001] , Stateoftheindustry.com, 2002] On 20th May 2003, PPB Magazine reported that Gary Vonk replaced Bob Siemering as CEO of Cyrk. [ [http://cache.zoominfo.com/cachedpage/?archive_id=0&page_id=479199651&page_url=%2f%2fwww.ppai.org%2fPublications%2fPPBNewslink%2fNewslinkDetails2.asp%3fNewsletterID%3d128&page_last_updated=2%2f9%2f2004+3%3a31%3a19+PM&firstName=Gary&lastName=Vonk Cyrk Names Vonk President] , "PPB Magazine", May 20, 2003] In 2005, Cyrk, now based in Monroe, Washington appointed Alan Patrick as CEO. [ [http://www.ppa.org/Legacy/Publications/PPBNewslink/NewslinkDetails2.asp?NewsletterID=289 PPB Magazine] , Feb 16, 2005] They are now an "affiliate of Sun Capital Partners, Inc. [ [http://www.cyrk.com/cyrk/newsroom.asp?pr=newbiz Cyrk.com, Press Release, "Cyrk Announces New Team"] Nov 4, 2005] and the "entire Cyrk team" numbers fewer than 20 people. [ [http://www.cyrk.com/cyrk/newsroom.asp?pr=CatAward Cyrk.com, Entire Cyrk team picture] ] Alan Patrick and Matt Toomb, Cyrk CEO and VP of Sales, were both terminated in early April 2007.

On July 10, 2007 Cyrk introduced Jeffrey Werner as CEO. [ [http://www.cyrk.com/cyrk/newsroom.asp?pr=werner Press Release, "Cyrk welcomes Jeffrey Werner as CEO"] , July 10, 2007]

Meanwhile, Simon Worldwide is still traded as OTCBB|SWWI on pink sheets. [ [http://biz.yahoo.com/ic/16/16222.html Biz.Yahoo on SWWI] ]

Notes

Resources

* [http://www.cyrk.com Cyrk.com website]
* [http://www.thedartmouth.com/article.php?aid=1995110801050&action=print Cyrk executives speak] , "The Dartmouth", Nov 8, 1995
* [http://www.fool.com/features/1996/sp0805d.htm 1996, Q2 Earnings Report] , Motley Fool, Aug 4, 1996
* [http://query.nytimes.com/gst/fullpage.html?res=9F04E0DD1439F93AA35756C0A961958260 CYRK agrees to buy Simon Marketing] ,"New York Times", May 9, 1997
* [http://www.fundinguniverse.com/company-histories/Cyrk-Inc-Company-History.html History of Cyrk to 1997]
* [http://sec.edgar-online.com/1998/03/30/08/0000950135-98-001948/Section2.asp Cyrk 10-K Filed 3/98] , Edgar Online, Mar 30, 1998
* [http://72.14.253.104/search?q=cache:P9ySIqcnGEoJ:www.gilardi.com/pdf/cyrnot.pdf+%22Gregory+Shlopak%22&hl=en&gl=us&ct=clnk&cd=3 Class Action Lawsuit in 1998]
* [http://www.findarticles.com/p/articles/mi_m0EIN/is_1998_June_26/ai_50117122 Corporate Profile] , "Business Wire", June 26, 1998
* [http://promomagazine.com/news/marketing_whos_news_4/ Two top CYRK execs resign] , "Promo Magazine", Sep 1, 1998
* [http://www.socratek.com/Agreement-Preview.asp?num=189691 Shlopak Severance Agreement]
* [http://multichannelmerchant.com/news/marketing_new_catalogs_11/ CYRKs new catalog] , "Multi Channel Merchant", May 1, 1999
* [http://www.findarticles.com/p/articles/mi_m0EIN/is_1999_August_12/ai_55433402 1999, Q2 Earnings] , "Business Wire", Aug 12, 1999
* [http://boston.bizjournals.com/boston/stories/1999/08/30/daily10.html Yucaipa takes $25M stake] in Cyrk Inc, "Boston Business Journal", Sep 2, 1999
* [http://www.clickz.com/showPage.html?page=333221 CYRK forms internet subsidiary] , "ClickZ news", Apr 3, 2000
* [http://query.nytimes.com/gst/fullpage.html?res=9904EED7143BF936A25754C0A9669C8B63 Cyrk Merger being explored] , "New York Times", July 15, 2000
* [http://promomagazine.com/agencies/marketing_whither_cyrksimon/ Exploring Strategic Alternatives] Could mean break-up for Cyrk, "Promo Magazine", Oct 1, 2000
* [http://sec.edgar-online.com/2001/05/10/0000950135-01-501100/Section7.asp CYRK 10-Q Filed 5/2001] , Edgar-Online, SEC filings
* [http://72.14.253.104/search?q=cache:4aEVIW6Gno0J:www.fbi.gov/pressrel/pressrel01/finaffar.pdf+%22Jerome+P+Jacobson%22&hl=en&gl=us&ct=clnk&cd=9 Affidavit of Richard Dent]
* [http://www.stateoftheindustry.com/2002/distributors.asp sold Corporate Promotions Group in Feb 2001] , Stateoftheindustry.com, 2002
* [http://www.suncappart.com/index.php?page=portfolio_s&company=11 Sun Capital Invests] , Dec 2002
* [http://sec.edgar-online.com/2005/04/01/0000950135-05-001809/Section2.asp Simon Worldwide 10K] , Edgar Online, filed Apr 2005
* [http://www.wnem.com/Global/story.asp?S=3589132 Brae Capital invests in Serious, advised by Marx and Shlopak] , Press Release from Serious, reported on WNEM TV5, July 13