Jordan Greenaway, Director at PR agency Profile, has warned that the collapse of the London IPO market could create a “death spiral” for the independent PR sector in the capital.
Recent data from Goldman Sachs showed that the UK stock market was shrinking at its fastest pace in history. The impact of this decline is now being felt across the city’s PR industry, with smaller, independent agencies feeling the brunt, according to Greenaway.
“The London IPO market is in a dire state. While there might be rumours about big listings coming down the track, this is thin gruel given the last decade. While the London market has continued to shrink over recent years, the PR sector has actually grown. There is no way that this trend can continue, and I expect to see a reckoning over the next 6 to 12 months.
“We’ve already started to feel that over the last 6 months, with a number of agencies merging to tighten their belts. This is just raw mathematics. If start-ups, scale-ups, and pre-IPO businesses continue to pick elsewhere because of the shallow IPO market in London, there will simply be less work to go around.”
Greenaway argues that London’s large, world-class PR industry has been built to support a dynamic, active business ecosystem, with PR agencies supporting companies with the transition from start-up to scale-up to listing. If these businesses are now choosing to base themselves elsewhere, it could mean that the London PR sector will have to shrink in response.
“Let’s be clear: it’s the smaller, independent agencies that will feel the brunt of this collapse. Many of the largest agencies already have the insurance policy of global offices and the ability to position themselves as worldwide agencies. If you’re a London-first agency, your fate is inextricably tied to the capital. There is a real threat of a death spiral facing smaller London agencies, with many boutiques circling the plug hole.”
Greenaway added: “That’s why we have been refocusing our investment and growth plans in the US and elsewhere, and I know we’re not the only agency doing this.”
