"[The agency] couldn't make a profit anytime in the foreseeable future," said Fernan Montero, ceo- Y&R Europe.
In Y&R Norway's case, poor management and misrepresentation of the shop's profitability escalated the losses. The agency, with 41 employees, billed $60 million in 1993 according to Advertising Age figures, down 12% from 1992. Gross income for the shop, which handled Nissan, Jacobs Suchard and United International Pictures, was $9 million.
J. Walter Thompson Co. and Saatchi & Saatchi Co. have also closed offices-both in Sweden-in the last two years.
"We went bust [in Sweden] because of very heavy losses," said Carlos Fuentes, JWT Europe area director. He said ad spending in the Nordic region is small while staff costs are high, and the economies in Sweden, Norway and Finland are less active than in the past.
In Sweden, gross income fell last year between 12% and 26% at seven of the country's top 10 agencies, according to AA figures.
Clients are also increasingly moving to regional coordination with one strong Nordic office, often in Copenhagen, in part because Denmark is the only Nordic member of the EU. And their agencies, with some relief, are following the trend.