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(Aug. 7, 2001) JOHANNESBURG -- Bcom3 Group's Leo Burnett South Africa is in disarray following the abrupt resignation of its CEO, Andrew Fasedemi, and the loss of some major accounts.

Mr. Fasedemi, who has resigned to "pursue his own interests," is widely known to have had internal difficulties at the agency. Half Nigerian and half South African, Mr. Fasedemi was an important figurehead for the "empowerment" (black advancement) movement, and was one of only five black executives at the head of agency businesses among the top 30.

Two major clients have given the agency notice in the last two weeks. Liberty Life is believed to have been dissatisfied with the agency's campaign, and Lubner's, a leading furniture retail chain, has taken its business in-house "due to financial constraints."

Since January, the group has lost about $6 million in billings, including Coca-Cola Co. early in the year after an international realignment that took the account to Interpublic Group of Cos.' McCann-Erickson Worldwide.

Leo Burnett was South Africa's fifth-largest agency group last year, with income of almost $10 million, a 21% increase from 1999. The group comprises two mainstream agencies, Sonnenberg Murphy Leo Burnett (the flagship) and Red Nail, as well as LB Healthcare, LB Interactive, media agency Starcom and public relations company Manning Selvege & Lee.

However, Red Nail Managing Director Grant Baker said the agency is planning to separate from the group. There have been talks about it becoming part of BCom3's possible third network. -- Tony Koenderman

Copyright August 2001, Crain Communications Inc.

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