Arun Sudhaman 15 Nov 2016 // 9:46AM GMT
STOCKHOLM — Grayling is to exit Sweden after shutting down its Stockholm office, which had shrunk to just nine staffers in the seven years since the Huntsworth firm entered the market.
In 2009, Huntsworth acquired Sund Kommunikation, one of Sweden's fastest-growing PR firms, numbering around 45 employees. Since then, according to Dagens Media, revenues and profits have dwindled, with losses reportedly exceeding 10m Kr (£880k) last year.
Accordingly, after shutting down the Gothenburg and Malmo offices, Grayling will close its Stockholm operation and seek an affiliate agreement with a regional firm, said Continental Europe CEO Jan Simunek.
"Sweden has proved to be a difficult market for our business for some time now," Simunek told the Holmes Report. "There are a combination of factors that have worked against us."
"First, there are relatively higher costs involved in doing business in Sweden. On top of that, unlike elsewhere in Europe, most of the mandates in Sweden are project-based rather than long-term retainers. This makes managing the business profitably much more challenging than elsewhere."
In addition, said Simunek, clients increasingly require a Nordic footprint, which Grayling was unable to service via a small Stockholm office. He added that the agency is "currently going through a consultation process with staff, as well as the trade unions of which they are members."