Sibling Setbacks

After 19 years of spectacular growth, the world's largest advertising firm seeks a savior to halt a precipitous slide in earnings

For nine months advertising giant Saatchi & Saatchi has admitted that it was enduring a rough year. But when chairman Maurice Saatchi faced investment analysts in the company's luxurious London boardroom two weeks ago, the news was far worse than anyone had feared. After 19 years of uninterrupted growth, Saatchi's pretax profits for 1989 collapsed, dropping from $217 million last year to just $34 million, an 84% decline. After taxes and other provisions were deducted, the world's largest advertising firm reported its first net loss, of $92 million.

How could a firm long heralded for its go-go brilliance stumble so badly?...

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