Hoover Co., in a surprise move, is throwing its $25 million vacuum cleaner account into review even as it posts strong sales gains.
The search comes on the eve of a major product launch and coincides with a management shift at parent Maytag Corp., where President-Chief Operating Officer Lloyd Ward succeeds Len Hadley as chairman-CEO this week.
A spokeswoman maintained there is no connection between Mr. Ward's appointment and the agency review.
"This is a Hoover-driven process," she said. "As the company continues to grow and evolve, it was felt the time was right to review our advertising agency resources."
Euro RSCG Tatham, Chicago, has been Hoover's agency for 11 years and coined its current ad slogan, "Nobody does it like you." Tatham got the account one year before Maytag bought Hoover's worldwide business.
It was uncertain if Tatham would be invited to pitch, and agency President Gary Epstein could not be reached at press time.
The review, handled by Jones-Lundin Associates, Chicago, will be Hoover review concluded by Nov. 1. It's unknown how many agencies are being contacted, but others already on the Maytag roster, such as Leo Burnett USA, Chicago, are viewed as likely suspects.
The spokeswoman said preference would not be given to agencies representing other Maytag units.
Hoover is facing an increasingly competitive field where technology and advertising are king and devices such as robotic vacuums are unveiled yearly, said Perry Reynolds, director of marketing for the National Housewares Manufacturers Association.
"My feedback from retailers in the industry is that floorcare is an exceedingly hot category. It's driven by product development, by infomercials and by technological innovations," he said.
The estimated $3 billion industry continues to break records every year, according to the Vacuum Cleaner Manufacturers Association. For the first six months of 1999, sales were up 10.3% over last year's blockbuster 16.3 million units sold. Maytag does not report sales for Hoover, but 1998 sales were estimated at $800 million.
Hoover remains the dominant player and is sparking much of the industry growth, said Gerry Beatty, floorcare and major appliance editor at Home Furnishings News.
"I suspect that Hoover is putting a little more daylight between itself and No. 2. It's been pushing innovation...with more features," Mr. Beatty said. "They've driven up price points--theirs and the industry's. The sense I get talking to people in the industry is that Hoover has been able to move the entire industry up."
LAUNCH GOES FORWARD
Tatham's work will support Hoover's new launch of the SteamVac Widepath, a steam cleaner 20% wider than earlier versions. The unit, selling for $300 to $400, is being introduced in the third quarter.
Hoover is Tatham's second major loss this year, following Procter & Gamble Co.'s consolidation of $90 million in billings. On the plus side, Tatham picked up the $25 million Midas International Corp. account in December 1998.
Copyright August 1999, Crain Communications Inc.