Cyrk (Company)

Cyrk was once one of the largest promotions companies in the world with over 2000 employees worldwide. The company's stock was listed on NASDAQ under the ticker symbol CYRK. Founded in 1976 by Gregory Shlopak (born 1946) and Paul Butman (born 1949), Cyrk started as a company that did screen-printing of customized clothing. The company went public in 1993 and the stock price hovered around $40 per share. The company had several divisions although its consumer loyalty division was the company's cash flow engine.

From its earliest days as a public company and headquartered in Massachusetts, CYRK struggled with three significant gating factors in its public company business model: 1) customer concentration consisting primarily of Fortune 50 "Power Brands" 2) client disclosure restrictions imposed by the Power Brands which hindered CYRK's ability to provide quarterly forward looking guidance strongly demanded by Wall St. analysts and market makers and 3) volatility associated with the meteoric success of its consumer loyalty promotions totaling hundreds of millions of dollars over relatively short periods of time only to be followed in subsequent reporting periods by a resulting contraction in its sales base once the "Power Brands" marketing needs waned as consumers became engaged and increasingly loyal.

The bulk of CYRK's revenues were generated from the sale of custom promotional products employed as consumer rewards in points-based consumer loyalty promotions.

CYRK had three very successful public offerings between early 1993 and late 1994 underwritten by Montgomery Securities, all of which were oversubscribed.

CYRK revolutionized consumer loyalty programs by calling on its custom product expertise of design, manufacturing and fulfillment in concert with its in-house marketing agency expertise to deliver and enhance the brand equity of its clients in a consumer-facing loyalty program that drove market share as well as sustaining sales gains.

Notwithstanding high profile client success and the respect of its Power Brand clients, CYRK suffered from a public stock market in the mid and late 90's that primarily rewarded "New Economy", speculative dot-com companies of much less operating substance.

Ultimately, the flaws in CYRK's public company model during that period served as a drag on the company's stock price, frustrated investors and drove its board and management to pursue acquisition growth tactics in an attempt to diversify and address its struggles and investor pressures. The growth-oriented acquisitions included the ill-fated 1997 acquisition of Simon Marketing which led to a series of events in the ensuing years that undermined the company's focus, the loss of key managers at the parent company level and ultimately, the deterioration of the innovation that served the company's earlier success.

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