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How WPP empire is made out of wire

Vivendi, the French entertainment giant that was originally a water utility company, is in financial hot water, according to many analysts, because it became something it really wasn't. As Oliver Stone, the moviemaker, once put it in this column: "Universal pictures was bought by a sewage plant." (The French, of course, are proud of their sewers; they even give tours.)

But where the French failed, the English have succeeded, so far. In 1985, a young, unemployed marketing exec in the U.K. was surfing a computer database and found an obscure suburban factory that made wire shopping baskets and carts. He acquired a 30% stake in it for about $750,000 and immediately loaded his cart up with a long grocery list of marketing-services firms, and later big ticket ad agencies. He turned the basket-maker into the world's largest advertising organization with $8.17 billion in gross revenue last year. We refer of course to Sir Martin Sorrell, group chief executive of WPP Group, previously known as Wire & Plastic Products Ltd., Kent.

"We still operate the manufacturing division, essentially for sentimental reasons," according to a company insider. Gordon Sampson, 78, who founded Wire & Plastic Products in 1951, still runs the show- five factories, which employ 80 people. The company does not make shopping baskets and carts anymore, but it does produce domestic wireworks like dish drains and vegetable racks in plastic coated and stainless steel. It also produces Delfinware brand kitchen goods and Picquot Ware teapots and "sugarjacks."

"Martin was young and I was old," says Mr. Sampson, by way of explaining why he sold out. "As we get bigger we don't see that much of each other, but I do get on with him well."

When Sir Martin bought the plant it was making $5 million in revenue, according to press reports at the time. WPP's annual report this year says that the manufacturing division is flat. "We are still making profits but it's a bit quiet at the moment," says Mr. Sampson, who would not reveal current figures.

Despite the disappointing numbers, Sir Martin says he will not sell the division and does indeed hold on to it for sentimental reasons. "It reminds us of our industrial roots." He also plans to keep the name.

Apparently, the symbolism of the shop's inaugural product is not lost on the factory. "They send us a wire shopping basket when we're celebrating something like an acquisition," says the WPP insider.

A heartwarming touch, no?

"Yeah, there are not a lot of heartwarming stories at WPP. This is the closest thing to it."

Do the baskets come filled with fruit or goodies? "No, just an empty basket, which probably tells you something in itself."

Mr. Sampson chuckles when he hears this. "No, we don't do that," he says, unconvincingly.

My sweet lord

Speaking of turning plowshares into market shares, this just in from our European bureau, another extraordinary corporate transformation. "Megalomedia, the former new-media company launched by Lord Saatchi almost seven years ago, is now repositioning itself as a cake supplier with the acquisition of Memory Lane Cakes for $14.2 million," our Ad Age correspondent reports. "Following a series of loss-making acquisitions in both the entertainment and new-media business, Megalomedia last October sold the remainder of its assets to become a cash shell."

Apparently, Megalomedia will now be in the business of distributing "value added whole cakes [whatever that is], novelty cakes [erotic cupcakes, no doubt], celebration cakes, chocolate enrobed small cakes and muffins to U.K. supermarket giants." In Adages humble opinion, his lordship, otherwise known as Maurice Saatchi, who is Sir Martin's former boss by the way, should change the company name. A suggestion: Megalomuffins.

Contributing: Ali Qassim

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