Branding Helps Coffin Thrive Amid IR Firm Doldrums By JACQUELINE FOX Staff Reporter Success for a publicly traded company, particularly one that flies below the radar of the Deutschebanks and J.P. Morgans of Wall Street, depends in no small part on how effective the firm is at getting its story out to the investment community. Companies who may not be big enough to afford their own investor relations departments pay top dollar to outside firms, or IRs, to build up their profile on Wall Street and define a corporate brand for themselves. And yet, the last few years have not been kind to many of these IRs. Some have been acquired by larger, more diversified firms who, some in the industry say, often do little more than send out press releases and bill their clients for the work. Others have been dumped as their clients, in fact, have chosen to use in-house marketing and financial teams to save money in times of economic uncertainty. However, while all the shedding and absorbing of IR firms was taking place, one local company was bucking the trend. Sherman Oaks-based Coffin Communications Group is projecting its revenues will jump from $1.4 million in 2001 to $2.4 million by the end of the fiscal year, on June 31. Coffin has doubled its staff in the last year, from 12 to 24, opened a new office in San Francisco and is preparing to open another office in New York by year’s end. In 2000, the six-year-old company launched a marketing campaign it hoped would do for itself what it promises its clients: build up its brand, spread the word about its performance and target a market that suits the size and scope of the business and its plans for future growth. The turning of the tables has paid off. “Up until about a year ago, most of our business was coming from a couple of clients,” said Crocker Coulson, a senior partner with Coffin. Today, the company represents roughly 40 publicly traded companies, including Westlake Village-based semiconductor manufacturer Diodes Inc. and FAO Inc., formerly The Right Start, which purchased the assets of children’s retailers Zany Brainy and FAO Schwarz over the last two years. “That was a very complicated set of acquisitions for us,” said FAO CEO Jerry Welch. “Coffin was very responsive and very aggressive in making sure that every detail regarding those acquisitions was attended to, and that the nuts and bolts were released in a timely way.” That’s exactly what Coffin was hoping to hear as a result of its own campaign for itself. “A lot of CFOs of companies will say, ‘I spend money on IR services and I never really know what I’m paying for,”‘ Coulson said. Coffin concentrates on small to mid-cap companies, which don’t usually garner much attention on The Street, but need more than good placement in the local paper to attract investors. As a result, said Coulson, strong IR firms have to begin where it matters most: the numbers. “First and foremost, we begin by looking at the performance of a company and what’s driving its revenues, either up or down,” said Coulson. While it still helps to get an analyst’s attention, gone are the days when that’s all it took to put a company on the map. Analysts and investors alike are living in a post-Enron world with anticipated changes to the way companies file disclosure statements headed down the pike. “There’s no question that investors are skittish and one thing I can say about some of our clients is that the boards (of directors) are playing a very active role in what’s going on,” said Coulson. The darker side of IR is crisis control. A product tampering scare can be enough to send the stock of the strongest performing soft drink or pain reliever tumbling. But it’s a necessary evil, according to Larraine D. Segil, president and co-founder of the Lared Group, an international business consulting firm in West Los Angeles. “If I were running an IR firm I would be pitching to my client that you have to work on a conflict management program, especially in today’s times, when investors have been given pause and IRs run a risk of being hooked into a chain of liability when a company is telling lies,” Segil said. “That’s the challenge for us,” said Coulson. “We have some clients who are under economic stress because of the current market, so they’ve had to deliver bad news and that’s certainly not a lot of fun for us.”
