More Turmoil At ImageState

Posted on 5/4/2002 by Jim Pickerell | Printable Version | Comments (0)



May 4, 2002

Sources indicate that Sheldon Marshall has been removed from day-to-day operational responsibility at
ImageState and has been given the title of Vice Chairman. For the immediate future Chris Adamson,
ImageState's Chief Financial Officer, will take over responsibilities as President of the company while
they search for a new Chief Executive.

Officials at ImageState were not available for comment on Friday.

Indications are that in their efforts to find a new CEO they intend to focus their search in the U.S.
(their current headquarters) and look for someone with solid business management experience, rather
than someone with experience in the stock photo industry.

Marshall was the driving force behind the founding of ImageState in 2000. The goal of the company was
to consolidate a number of medium sized suppliers of still image, video and music content in order to
provide a variety of services to the B2B buyers in a more efficient manner.

The companies acquired include: Adventure Photo & Film, WestStock, John Foxx Images, Image Colour
Library, Zephyr, and International Stock. It appears that ImageStae has had major problems in
integrating these various brands, and in the process has created a lot of dissention among staffs and
image suppliers.

In addition it appears that their estimates in terms of potential revenue growth were unrealistic, and
the costs of integration were much greater than expected. One source with inside knowledge indicates
that they have "squandered" 4.7 million pounds (about $6.9 million). Part of their problems were
certainly related to the timing of their acquisitions in relation to what has been happening in the
advertising business and the stock photo industry in general.

One line of business of ImageState has been to represent catalogs that have been produced and supplied
by other agencies. Several of these agencies have reported that they have not received payments for the
sale of their images since late 2001. This could indicate cash flow problems, although the dimension of
such a problem is currently unknown.

ImageState is a publicly held company and their fiscal year ends June 30th. In the last reported fiscal
year they had gross sales of 3.164 million pounds and cost of sales (mostly royalties) of 1.203 million
pounds leaving a gross profit of 1.961 million pounds. Their operating expenses were 8.450 million
pounds leaving a huge loss. However, in the year ending June 30, 2001 they had only owned most of their
various acquisitions for less than a year and for the most part the integration had just begun.

The report for the period that ends June 30, 2002 should offer a much clearer picture of their problems
and potential. All but International Stock will have been owned for at least a full year and IS will
have been owned for 7 months.

In the last month things seem to have come to a head very rapidly (See Stories
469 ,
471 ) and the board
seems to be pushing for dramatic changes from top to bottom.

For more background see Story 381 .

Copyright © 2002 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


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