"A joint decision by both venture partners has been made to dissolve dRush," the agency said in a statement. "Due to increased business demands combined with 2003 opportunities already in the pipeline, it was agreed that resources would be better used to support initiatives that represent higher growth potential."
DRush handled Allied Domecq brands Courvoisier and Tequila Sauza.
Ten employees were laid off, the spokeswoman said, including President Peter Drakoulias, who left the shop last week. Scott Carlson, executive vice president and executive creative director; and Gill Linton, director of account planning, will stay with the shop for the next 90 days to continue servicing the Allied Domecq account, the spokeswoman said.
Allied's chief marketing officer, Kim Manley, said the country's No. 5 spirits marketer will stay with dRush for 60 days while it decides where to place ad work for Courvoisier and Sauza. The cognac received $12.5 million in measured media last year, while Sauza received nothing, according to Taylor Nelson Sofres' CMR.
DRush, launched in November 1999, was regarded as a promising partnership between Madison Avenue and the entertainment industry, as well as two colorful business leaders, Donny Deutsch and Russell Simmons.
Under Mr. Drakoulias, named president in 2000, the shop picked up work for Allied Domecq. But it was unable to enter multicultural reviews -- such as that for DaimlerChrysler's Chrysler Group -- because of conflicts with Deutsch clients, notably Mitsubishi.
An executive close to the agency said Deutsch is interested in winning general-advertising accounts rather than pursuing niche assignments such as youth and urban-marketing categories. And Mr. Simmons wants to focus on his many other properties, including Phat Farm clothing, Def Jam records and magazine One World.