Prize-winning UK start-up goes to the wall

Deepgroup, parent company to multi-award winning web design agency Deepend, has gone into sudden liquidation, closing offices in London, New York, Rome, Sydney and Prague.

A statement from the UK company said: "Digital communications group Deepgroup, was today put into liquidation with the loss of 180 jobs."

The firm was considered a leader in the web design market, picking up dozens of awards over the last two years, including 'Leading New Media Company' at the Advertising Age International awards.

Among Deepend's clients were the BBC, BT, Ikea and Nike. The company designed websites for French Connection, Hoover, Panasonic, Tango and the new Volkswagen Beetle.

In August the company confirmed it would have to cut costs but denied rumours of redundancies. "It's been the toughest six months in our history," Deepgroup chief executive Gary Lockton said at the time.

The company's collapse has taken the new media industry by surprise. Richard Latham, CEO of rival UK design firm Bluewave, said the news is dramatic. "You might say it's easy to make money during a boom, but Deepend were there before the good times started," said Latham. "They knew how to run a profitable organisation."

The economic downturn has hit internet designers hard, with many clients cutting back drastically on web spend. Latham said: "The writing was on the wall last November. The extreme increase in demand suddenly disappeared."

Deepgroup reported revenues of £9.4m for the last year and remained privately owned by its three founders, including Brunel University graduates Gary Lockton and Simon Waterfall.