Philly Business Journal Profiles Quaker City Mercantile
06/28/2002

"Quaker City Mercantile (formerly known as Gyro Worldwide) spins to its own beat"
Steven Grasse is the crazy man your mother warned you about.
Only now, Grasse is running a growing advertising agency that's gotten recognition representing the sin trade -- cigarettes, booze and strippers -- but also candy and sneakers.
With his head shaved clean and his G-Mart T-shirts and Friday afternoon beer-on-the-desk routine, Grasse presides over a staff of 67 that's housed in a cramped, chaotic former bank branch in Society Hill.
His company, Quaker City Mercantile, has clients that include R.J. Reynolds tobacco (Winston, Camel, Salem), William Grant & Sons (Glenfiddich Scotch, Hendrix gin, Just Desserts liquors), Puma sneakers, M&M/Mars and, locally, Delilah's Den, the gentlemen's club in Northern Liberties.
Grasse won't say how the large the agency is in billings. But Quaker City Mercantile, which is based on the 300 block of Walnut Street, is clearly riding high right now.
It is the agency of record for German-based Puma, which spends $90 million a year on advertising. Much of that is geared toward the World Cup -- and Quaker City Mercantile's commercials are playing throughout soccer-mad Asia and Europe right now. For the Puma-sponsored Cameroon team, for example, Quaker City Mercantile (formerly known as Gyro Worldwide) made a commercial that uses the same Japanese animation techniques used in video games. Another ad features international soccer stars in a old Western style fight, except instead of a saloon the fight takes place in a sushi restaurant.
On July 1, client R.J. Reynolds Tobacco Co. plans to broaden its line of Camel cigarettes, offering a stronger Turkish Royal brand. Grasse would not say, specifically, what that will mean. But, for RJR, Quaker City Mercantile (formerly known as Gyro Worldwide) handles point-of-sale materials.
"If you walk into a 7-Eleven, everything you see (marketing RJR brands) is our work," Grasse said.
For any other industry, that might seem like small potatoes. But tobacco companies, which spend $4 billion a year to sell cigarettes, can't advertise on TV or radio, so packaging and point-of-sale advertising are a huge outlay. RJR brands have nearly 6 percent of the market, up from 4 percent in the mid-1990s, according to industry research cited in Advertising Age.
The RJR approach -- coming up with new products, finding new ways to market them -- may have helped broaden Quaker City Mercantile's approach.
"We've been smart enough to diversify, rather than doing just advertising. That helps when the economy is down," Grasse said. "We also do event promotion, packaging, new product development, strategic promotion, strategic consulting. It's one of the reasons we've been able to stay around; we're multifaceted."
For example, for candy giant Mars, the firm is retooling Starburst packaging.
In an industry where everyone wants to be cool, Quaker City Mercantile (formerly known as Gyro Worldwide) seems to understand the 20-something market. But it also works hard to plumb the depth of that market.
"I hate the term Generation X," said Grasse, now 37. "We got tired of the slammin', jammin' talk that you'd hear in commercials. We were, like, `That's not the way we talk.'"
Quaker City Mercantile (formerly known as Gyro Worldwide) has also branched into the retail business, which gives it a first-hand look at purchasing patterns.
Quaker City Mercantile (formerly known as Gyro Worldwide) runs a retail shop on North Third Street in Old City, G-Mart, that sells retro sneakers and T-shirts. The store has monthly sales of $30,000 and is profitable, Grasse said. It is also the largest seller of Puma sneakers in the city.
Then there's the Sailor Jerry brand, which is a line of clothing and a type of rum named for the famous Honolulu tattoo artist. The clothing is sold in 1,200 retail stores worldwide, and its top market is Japan. Sailor Jerry is also a brand of rum, which is distributed by another Quaker City Mercantile (formerly known as Gyro Worldwide) client, William Grant & Sons, and is sold worldwide.
"Sailor Jerry is a significant revenue generator, (and) it helps with our underground image," Grasse said of Sailor Jerry, whose Web site links to tattoo parlors and sponsors tattoo contests.
Quaker City Mercantile (formerly known as Gyro Worldwide) also produces independent films like "Bikini Bandits," which had its debut at the Philadelphia Film Festival this spring. The movie is shameless in its exploitation of bikini-clad women and stars a lot of, well, formerly famous people, like Corey Feldman, Jello Biafra and the late DeeDee Ramone. But Grasse loves it.
"I want to make big movies," he said.
Quaker City Mercantile (formerly known as Gyro Worldwide) seems to specialize in all things politically incorrect -- which is partly how the company got where it is.
Quaker City Mercantile (formerly known as Gyro Worldwide) was founded in 1989 by Grasse and Emma Hagen, who is no longer at the agency.
Around that time, Shyamala Joshi was working in the New York production office of fashion designer Albert Nipon. In an effort to get her business, Grasse called incessantly.
"He called every day. He wouldn't stop calling," Joshi said. "Finally, I just said, `OK, I'll meet you at 30th Street Station before I catch my train to New York. Five minutes. That's it.'"
They got to be friends and he eventually convinced her to join the agency.
Joshi, now president of Quaker City Mercantile, said her relationship with Grasse depends on a good guy-bad guy approach. Which is which?
"That depends. Today he's the bad guy," she said. Overall, in advertising, "so much is pranks and performance art."
Along those lines, their biggest break may have been in using Charles Manson in a print campaign for the South Street punk rock store Zipperhead. Grasse freely admits it was tasteless and got them fired by a major telecom company.
But it also gained them media notoriety. As it's been said, there's no such thing as bad publicity. The piece led to work with MTV, which lasted for seven years and spun itself into other work.
In Philadelphia's agency community, Grasse clearly relishes the bad-boy role. Snubbing convention, Quaker City Mercantile (formerly known as Gyro Worldwide) does not participate in the Philadelphia Advertising Club or AAAAs.
It wasn't always that way. At one time, Quaker City Mercantile (formerly known as Gyro Worldwide) was proud of winning local awards. But Grasse and Joshi knew their focus had to be national and worldwide advertising.
"We threw out all of the awards," Joshi said simply.
Now, in an age when independent agencies are often just a check away from becoming part of a monster conglomerate, Grasse acknowledged that there are advantages to being part of a bigger agency company -- say, an Interpublic Group or Omnicomm.
"It gives you access to bigger clients," he said. "And a lot of offices."
But, when asked about then having to take orders from someone else, Grasse's face turns dark. "It only gets worse when you get to that level," he said.
- Peter Van Allen

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Philly Business Journal Profiles Quaker City Mercantile