An Initiative spokesman said, "We were unable to agree on satisfactory business terms," but did not elaborate on the reasons for the change. Ray Warren, president of Carat Americas, said, "We are delighted to have Revlon back in the Carat family, and were looking forward to growing the account around the world."
In addition to planning and buying, Carat also retains digital planning, buying and search.
The surprising move comes almost a month after the New York-based marketer announced plans to move its $150 million-plus media account to the Interpublic-owned agency. On a March 15 conference call with analysts, Revlon CEO David Kennedy enthused, "We've just engaged a new media-planning and -buying agency, which we're very excited about. They are affiliated with our new advertising agency for the Revlon brand, and we believe they will bring some very new and exciting ideas for us to consider. ... [Revlon's Super Bowl ad] was brought to us by our new ad agency, along with this new at the time media-planning agency, and we think that worked very well for us in launching Revlon's Colorist line."
Endeavor, a talent agency that is part-owned by Interpublic Group of Cos., creates advertising for Revlon brands, including the spot featuring singer Sheryl Crow that aired during the Super Bowl.
Mark Dowley, a former executive at Initiative sibling McCann WorldGroup and now an executive at Endeavor, brought Initiative to the attention of Revlon management, according to knowledgeable executives.
Kiki Rees, Revlon senior VP-marketing and communications, confirmed that Carat remains the company's media agency, and cited contract issues as the cause for the change. Asked whether possible conflicts with another Initiative client, Victoria's Secret, which in the past six months launched a new cosmetics line, "Very Sexy Makeup Collection," was the cause, she said no.
A call to Victoria Secret Beauty was not returned at press time.
Revlon in November reported a third-quarter loss of $100.5 million, or 24 cents per share on revenues of $305.9 million, vs. a loss of 17 cents per share or $65.4 million, on revenues of $275.3 million, for the third quarter a year ago. The losses were attributed to poor sales of its new Vital Radiance line, products aimed at women over 50, which launched in January, and is being abandoned, as well as restructuring and management-severance costs.
Mr. Kennedy, Revlon's CEO, replaced former CEO Jack Stahl last September.