Following last month's loss of the $100 million Procter & Gamble Co. account and the resignation of 60 staffers who worked on that business, New York-based Wells last week saw its $30 million Heineken USA and $8 million TAG Heuer USA accounts leave.
CHASE OPENS REVIEW
In addition, Chase Manhattan Corp. puts its $40 million account into play. Wells handles corporate advertising while McCann-Erickson Worldwide, New York, handles retail. Chase also works with boutique shops.
On Feb. 12, as a result of the P&G loss, 40 employees were given in excess of 30 days notice and invited to look for positions within Omnicom Group, New York, which agreed to acquire Wells parent GGT Group, London. It is expected to finalize the deal ahead of schedule, perhaps by early March.
In a memo to top GGT executives, Omnicom President-CEO John Wren called the employees "innocent victims" who would be accommodated where possible at other Omnicom shops, even beyond the time allotted.
A Wells spokeswoman said the agency does not expect further layoffs as a result of its latest losses. Heineken, which is going into review, cited conflicts with Anheuser-Busch Cos., a client of two Omnicom agencies.
McCann and J. Walter Thompson USA, New York, are among agencies going after the Heineken business. Heineken may take members of the Wells team and relocate them to a different agency.
At week's end at least two other accounts appeared vulnerable: rental car company Hertz Corp., majority owned by Ford Motor Co., and Toys "R" Us, which was said to have held talks with former Wells Executive Creative Director Linda Kaplan Thaler.
Ms. Kaplan Thaler -- now president-CEO at Kaplan Thaler Group, New York, which she formed after resigning from Wells last year -- said she had not been approached to take over the account. Toys "R" Us executives said their conversations with Ms. Kaplan Thaler were just friendly calls.
Account losses are not the only problem for Wells and GGT.
Mr. Assumma, Wells' former chairman-CEO, filed suit against GGT seeking $2.6 million for breach of contract, $10 million for loss of future earnings and $2 million in damages for alleged defamation.
Executives at GGT shops -- who are being cashed out of their stock at a loss as part of the acquisition -- speculated GGT would countersue, but no counterclaim had been filed at press time as far as could be determined. Mr. Assumma did not return calls; spokespeople for Wells and GGT refused comment citing the pending litigation.
WON'T BLOCK DEAL
Mr. Wren said the legal action would not block the deal or affect its price of $234 million cash. "We certainly factored in all the possibilities . . . so we're not shocked by anything that has occurred," he said.
Mr. Assumma was replaced by Steve Davis, former CEO at Y&R Advertising, New York, charged with stabilizing Wells and stemming the client exodus before the sale is closed.
TAG Heuer has moved to Saatchi & Saatchi, New York.
Chase has invited Wells to participate in its review, but has not decided whether to consolidate the account at one agency. Grey Advertising, New York, is considered a leading contender for the business. An estimated 30 agencies have been contacted by the bank to make a pitch. Chase hopes to have TV commercials on the air by summer.
"We are reviewing all our agency relationships," said Frederick Hill, exec VP-corporate marketing and communications at Chase. "We want to take our advertising to a higher level and reduce our costs." But the account losses have made it likely Wells will be merged into an existing Omnicom agency in New York, possibly TBWA Chiat/Day, which is expected to sublease its office space in New York's financial district and move into Wells' headquarters.
Contributing: James B. Arndorfer, Alice Z. Cuneo, Laura Petrecca, Pat Sloan.