Tuesday, September 23, 2014

Expanding and collapsing.

It wasn't long ago in New York that there seemed to be a Crumb's Cupcake bakery on nearly every corner. Before that, there was a GAP, or a Benetton, or a Blockbuster video nearly everywhere. Before those, something else.

A friend of mine explained it to me once. Her father has been successful in the rag-trade and had explained it to her.

Retail businesses expand to the point of absolute collapse.

They're constantly looking for new money, from either the stock exchange, independent investors or some other form. So the best way they can show they're vibrant and thriving is to hang out another shingle.

If you're lucky enough to ride such places on the way up and get out just before collapse, you can make a fortune. Most people, of course, especially those without inside knowledge aren't that lucky. And they lose whatever they threw into the pot.

All this, of course, comes back to advertising. More specifically advertising holding companies. One holding company, a relatively small one, lists nearly 100 agencies on its roster, in a couple of dozen specialties.


Do we need all these places? Is there a need for all of them and all their siloed expertise? Or are we just opening shops to show that most ridiculous of words...momentum?

My personal feeling is that the business has over-expanded for visual effect.

Collapse isn't just coming. It's deserved.

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