City & Corporate: Flotation PR needs long-term thinking

Jessops, the high-street camera retailer, is having a hard time, but should anyone be surprised? As if the rush to digital was not disruption enough, the industry now has to cope with cameras in mobile phones.

Carphone Warehouse CEO Charles Dunstone tells me he sells more cameras than anyone else in the country - although his come with a phone attached.

All this turmoil has caused Jessops' profits to tumble, which would be less of a problem had the business not floated last year.

During flotation, its PR convinced investors that its future was rosy, and it sold its shares at twice the price at which they now stand. Investors are not best pleased with Jessops' management - so was the float a success or a failure in PR terms?

This is a difficult one. Listings are a major source of revenue, even when business is slow. That is because successful marketing to investors requires getting the press coverage right, identifying the main company messages and creating the right air of expectation.It has always been like this, but investment banks have become much more skilled at gauging demand for new issues and charting demand against price - squeezing out every last penny of value when setting the selling price.

The consequence is that most firms - not just Jessops - fail to perform well after they have listed, and the vast majority cost investors money. The PR industry has to recognise that excellent pre-flotation work is likely to produce post-flotation let-down.

The investment banks don't mind this because they no longer value long-term relationships with clients, but PR is different - it can't play fast and loose with relationships.

That is why PR needs to balance the short and the medium term much more carefully when promoting new issues.

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