The profits of Zaha Hadid have fallen by two thirds

The real impact of the recession on significant architectural firms, the so-called signature practices has started to reveal itself this week with the news of a two-thirds drop in profits for Zaha Hadid Architects.
According to the latest financial reports, the financial volumes that the office of the world's most famous female architect achieves have dropped by 69 percent – from just over £5 million in 2008 to only £1.6 million in 2009 (related to March).
Illustrating the challenging period Hadid is going through is the margin of corporate numbers – the share of corporate turnover that constitutes profit has fallen from 19 percent in 2008 to only 5 percent.
In a statement, the firm attributes the decline to restrictions on bank loans, which it claims have affected the entire construction sector.
Despite the declines, the unnamed highest-paid director's salary jumped by half to £290,000 (it is customary in the UK to report annual salaries – editor's note).
Turnover also increased by 11 percent to £29 million, in connection with acquiring new contracts, such as the Vienna library or winning a competition for the new headquarters of the port authority in Antwerp, Belgium.
Following the new contracts, the number of employed architects in the office also rose by 19 percent to a total of 262.
Since last March, Hadid has secured several prestigious commissions, including a project for the Expo exhibition center in Cairo or another Egyptian project called Cairo Stone Towers, which represents a five-star hotel with serviced apartments.
A spokesman for Zaha Hadid Architects told Building Design: “The numbers prove that the company is growing and is driven forward by an increasing amount of work. We expect to report on further significant successes this year.”
An unnamed competitor adds that it is not surprising that Hadid is hiring new people instead of laying them off. “It is the only firm that has captured the trend.”
“You do not hire if you are not sufficiently confident in forecasts. Many people want a building by Zaha Hadid just because of her, and moreover, British designers are highly valued worldwide precisely because of people like Hadid and Foster.”
The numbers reflecting the position of David Adjaye's firm, Adjaye Associates, have also surfaced. They show that losses have increased nearly tenfold to £526,000.
Last February, Adjaye brought in crisis management/insolvency experts in hopes of saving the office from financial ruin, which it was on the brink of at that time. Together with creditors, new rules were established under which the firm will pay a total of £132,000 in monthly installments over the next five years.
Adjaye also transferred his own £500,000 into the business, although accounting shows that the firm's shareholder deficit stands at £440,000.
Lane Bednash, a partner at the insolvency practice Valentine & Co stated that according to annual closure of the crisis management, “all payments were made on time. None were delayed by Adjaye Associates.”