Corporate reputations can be destroyed in minutes. Sometimes it takes years. A dating show with a sunny image is acquiring dark undertones. The third suicide linked to ITV’s Love Island should give pause to investors and bosses alike.
Lombard’s habitual flippancy does not apply to tragedies such as the recent death of Caroline Flack. It is not for this column to apportion blame. Ms Flack had personal problems, not least a looming trial, and had stepped down from presenting the show in December. Two former contestants killed themselves years after appearing on the programme.
ITV faces difficulties in distancing itself, however, having used the show to lure the Instagram generation. Love Island’s sun, six packs and sauce mean its “reach” — though not technically its audience — includes one in two 16-34 year olds. This is a Godsend for a legacy broadcaster with flatlining earnings imperilled by the streaming revolution.
Unfortunately, the programme also exposes young people, some of them plainly vulnerable, to vindictive public scrutiny.
Investors have discounted serious financial consequences. ITV shares are trading at the same level as before the death of a participant on The Jeremy Kyle Show last May. After that, ITV’s share price took a kicking, falling 20 per cent in six weeks or so.
ITV will not cancel Love Island as readily as it did The Jeremy Kyle Show, a mean-spirited entertainment out of tune with boss Carolyn McCall’s humane style. There is no immediate threat to the broadcaster’s financial outlook. Love Island was reinstated after a day’s break. Sponsors such as Just Eat are staying on board. ITV is taking action to safeguard contestants.
But nevertheless Dame Carolyn, who is an outstanding CEO, needs to recognise underplayed risks. Thomas Cook bosses failed miserably when they stonewalled a couple whose children died in a hotel accident in 2006. The reputational damage took nine years to play out.
Further deaths would be the end of Love Island. Derivative formats generally flop. The value of ITV’s prized asset may already be impaired.
Hambro not so Perky
Reminder to City big-hitters: if you are going to bet on a tech start-up, beware of one in the laundry business.
Michael Spencer’s £2m flutter on Laundrapp, a home delivery shirt and socks service that has just gone into administration, has certainly presented headline writers with plenty of ready-made gags to work with. The creator of interdealer broker ICAP has variously “lost his shirt”, “been taken to the cleaners” and so forth.
Founded in 2014, Laundrapp burnt through more than £25m in its short life, much of it splashed on marketing. Others have fared better. LaundryRepublic, a rival service, is profitable despite raising just £650,000.
It all goes to show the uncertainty of the tech venture industry.
Laundrapp’s co-founder, “serial entrepreneur” Dominic Perks, was also the man behind its anchor backer. He joined forces with City old-hand Rupert Hambro six years ago to set up the venture capital firm Hambro Perks, which put in £1.5m.
The idea was to bring together Perks’ tech buddies with Hambro’s network of deep-pocketed and shrewd Square Mile types. Laundrapp had a number of City backers, including some partners of the Toscafund hedge fund and Jeff Blue, a former Merrill Lynch banker.
How well is the Hambro brains trust doing? Not easy to tell.
The firm recently had a few slip-ups with a number of once-vaunted start-ups failing, including Tootle, an online car sales service, and Labrador, which was supposed to provide home smart meters that switched customers to the cheapest energy supplies.
That said, everything can turn round if you have one giant winner. One of its biggest bets is What3Words, a tech business which has raised nearly £50m. It is remapping the world in 3 metre blocks, a move that might pay off if Amazon ever does drone deliveries. That would redeem any number of lost shirts.
Cenkos’ new chair
Jim Durkin, co-founder and boss of City broker Cenkos, is not one to cede control easily. When he handed over the IPO machine to an outside chief executive in 2017, his retirement lasted just 18 months. His return spelt the end of ex-Schroders’ executive Gerry Aherne’s six-year stint in the chair.
So Lombard notes with interest the appointment of Lisa Gordon as chairman, ending an 18-month vacancy. She will add governance credentials, often scarce among Aim-quoted companies. More important is her expertise in founder-led outfits. She will need it.
Hambro Perks: email@example.com