Another CR-based Business Closes

I feel very lucky today. Not only am I alive, I do not work at FusionFarm in Cedar Rapids, which is great because it is going to close. From the CBJ:

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Cedar Rapids-based Fusionfarm to close later this year

Cedar Rapids-based Folience has decided to close Fusionfarm, the marketing agency it created seven years ago.

In an announcement that Fusionfarm would shut its doors later this year, Folience CEO Daniel Goldstein, who leads the ESOP-owned holding company, said that while the agency has excelled at producing high-quality, award-winning work, “the business model for Fusionfarm just was not economically sustainable.”

Mr. Goldstein declined to elaborate on issues with that business model, saying only that the decision was not made before considerable efforts to address them. Fusionfarm, led by Kelly Homewood and Michael Zydzik, was one of Folience’s first efforts to diversify beyond the company’s roots in the newspaper and television industries as the digital transformation shifted the media landscape.

If its financial performance was not up to expectations, Fusionfarm’s work for clients drew ample recognition. The agency, which employed 13, recently won its third Midwest Emmy for its edgy “Downtown Cedar Rapids Sucks” campaign. The firm was also recently invited by AdAge to pitch to consumer giant Procter & Gamble, and was named as the Best PR/Creative Agency, Photographer/Videographer, and Website/App Developer in the Corridor this summer by CBJ readers.

The news followed layoffs last month that affected 25 employees at Folience’s Color Web Printers, and the departure this month of Steve Lorenz, a company veteran who oversaw sales as print product manager at the company’s Gazette Communications business.

Mr. Goldstein said the layoff, the departure and the closing decision are unrelated, and don’t reflect problems at the ESOP-owned holding company. He said the decision to close Fusionfarm was difficult and doesn’t reflect on the efforts of the team.

“As businesses develop and succeed there can be necessary actions that are difficult, no matter how necessary,” Mr. Goldstein said. “Folience continues on a trajectory of growth and increased profitability.”

While declining comment on the circumstances of Mr. Lorenz’ departure, Mr. Goldstein said Gazette Communications is expected to announce a replacement and continue its three-leader model. Fusionfarm will work with clients in a variety of ways to ensure their needs are met as it winds down operations, he added.

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