Energizer Holdings is moving marketing duties for a slew of brands from one WPP agency to another. The personal-care business that's been handled by Greywill now be realigned under sibling shop JWT, according to executives familiar with the matter.
The move comes as Energizer this summer stated it will begin focusing more on "brand development activities" for its personal-care products in the face of stiff competition. It may have also been influenced by Grey's recent win of Procter & Gamble's biggest ad account by spend, Gillette.
Energizer couldn't immediately be reached for comment. Grey and JWT both declined to comment on the move. For its part, a P&G spokeswoman said: "I'm not aware of any conflict on our side."
Energizer -- generally associated with its flagship name-brand batteries -- has been growing its portfolio of products into a range of new categories via a string of acquisitions over the past few years.
Its portfolio now includes personal, baby-care and sun-care brands such as Playtex, Hawaiian Tropic, Banana Boat and Diaper Genie, as well as a range of shaving brands, such as Edge, Wilkinson Sword, Skintimate and Schick. (JWT was already handling the Schick account)..
For JWT, it's the second win of the summer on the heels of an expanded relationship with Nokia.
It remains to be seen whether this consolidation could impact a trio of Johnson & Johnson feminine-care brands Energizer recently acquired. It agreed last month to buy J&J's Stayfree, Carefree and O.B. brands in a $185 million cash deal expected to close in the fourth quarter. Those accounts are currently handled by Omnicom Group's DDB.
Facing Stiff Competition
Late last month, Energizer Holdings CEO Ward Klein said as part of an earnings call: "We are disappointed with our weak top line results as we continued to see elevated levels of competitive promotional activity in our personal care categories and many of these categories showed value deflation in the quarter." The company noted that net sales for personal care were down 3.6% in the quarter ending June 30. Overall net earnings for the quarter were $87.2 million, compared to net earnings of $70.2 million in the year-prior period.
"As we look towards fiscal 2014, our key points of focus will include delivering our stated cost and working capital reduction objectives, restoring top line growth in personal care and investing in innovation and brand development activities to ensure the long-term health of the business," said Mr. Klein. "We face many challenges including a difficult competitive environment."
For the first nine months of year, Energizer's advertising and promotional expenses were slightly down, to $318 million, or 9.4% of net sales as compared to $349.9 million, or 10.2% of net sales in the prior period. But given the company's guidance about brand-building being a priority, it's likely that number could increase going forward.