EARLE PALMER BROWN TO CLOSE MARYLAND OFFICE

Staff, Accounts Move to Arnold Worldwide; N.Y. Operations Could Be Next

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BOSTON (AdAge.com) -- Troubled Panoramic Communications is closing the Bethesda, Md., office of Earle Palmer Brown, as that agency's larger accounts along with 30 staff members move to Havas' Arnold Worldwide Partners, McLean, Va.

Arnold, meanwhile, is believed to be negotiating with Panoramic with an eye toward folding at least some of EPB's New York operations into the New York office of Arnold McGrath Worldwide.

About 10 EPB staff in Bethesda will be laid off. Accounts shifting to Arnold include U.S. Treasury Department and Department of Transportation; Blue Cross/Blue Shield Federal Program; and the American Bankers Association. Terms were not disclosed, though the accounts were valued at about $40 million. With the deal, Arnold expands from 90 to about 120 people.

Executive appointments
Charlie Jones, president of EPB Bethesda, joins Arnold as executive vice president of operations, and Woody Kay, EPB's executive creative director, becomes executive vice president and chief creative officer. Arnold has had no executive creative director since this past summer when Matt Smith departed.

"Woody brings a world-class reputation, world-class creative work to

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the Arnold office, and it's something we've been looking for, so it really works out for all of us," Ken Umansky, president of Arnold in McLean, told AdAge.com.

Four office network
Arnold is trying to strengthen its four-office domestic operations. Last year, it bought St. Louis' Simmons Durham, while parent Havas shifted New York's Jordan McGrath to Arnold from Euro RSCG. In addition to the McLean office, Arnold is headquartered in Boston.

Arnold would not comment on plans for EPB in Manhattan, though Lance Mald, EPB's chief creative officer, told AdAge.com, "We're in discussion on a couple of options that should help some of the clients and people in New York." A decision is expected soon.

Arnold McGrath President Mary Baglivo had been CEO at Panoramic until this past summer. She could not be reached for comment today.

EPB New York has about 40 employees and four active clients, though Berkshire Hathaway's Helzberg Diamonds' $8 million account is in review. The other accounts include DeLonghi SPA kitchen appliances ($3.4 million), CitiGroup asset management unit SSB Citi and Accor SA, owner of Sofitel and Novitel hotels ($154,000).

Declining fortunes
The 50-year-old EPB has seen its fortunes decline. In April, Panoramic Communications lost its financing from majority investor PubliGroupe, after the Swiss communications conglomerate posted a $117 million loss for 2001. PubliGroupe owned 50.5% of Panoramic Communications.

Arnold is the country's No. 15 agency, while EPB is No. 74.

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