Madhouse Associates, the well-known Manchester agency, is to close with the loss of 16 jobs.
The company is currently being wound up and dissolved, although staff will be staying until the end of the month to complete account work.
Co-founder Phil Rogerson told Prolific North: “Over the past 17 years Madhouse has been my passion and I am immensely proud of the strategically sound and high levels of creative solutions my team has delivered to meet diverse briefs from a wide spectrum of industries spanning Europe, America and the UK.
“It is with a heavy heart I have taken the decision to recognise market trends and address the reality that Madhouse Associates can no longer continue to operate in the market in its present set up.”
The decision comes just weeks after co-founder Peter Craven announced he had left the agency to “find a new challenge”.
At the time, Rogerson had said it was “business as usual” and announced a replacement for Craven as client services director.
Rogerson and Craven had originally set Madhouse up in 1999 having previously worked together at Liverpool-based Sony Psygnosis, a subsidiary of Sony specialising in game development.
It grew into a £2m-plus turnover business and held long-term relationships with key international accounts including Motorola, Toyota, Calypso and Lexus.
And in November it was ranked 44th in the Prolific North Top 50 Integrated Agencies table.
Rogerson and Craven each share a 50% stake in the agency. Companies House data shows that shareholders’ funds at the agency have dipped from £342,946 in 2012 to £175,409.
Madhouse operates from offices on Deansgate, and signed a 10-year lease on a 5,072 sq ft space in 2011.