The move comes amid a turbulent retail year in which chains such as J.C. Penney Co., Nordstrom, Macy's and Eddie Bauer Inc. are shifting agencies or creative approaches. The Gap is also in talks with a number of boutique shops to help its in-house agencies build sales at Banana Republic and possibly the Gap and Old Navy chains.
"There is a terrible, terrible decline in [the retail] business and the department stores are writhing and wiggling and trying to get out from under," said Kurt Barnard, president, Barnard's Retail Trend Report, a forecaster. "They haven't found a way out so far."
AUGUST SALES FALL
Target Corp. sales at stores open at least one year fell 5.3% in August vs. the same month in 1999. But the Target chain itself -- which saw sales rise 3.2% in August -- isn't included in the Arnold assignment. Peterson Milla Hooks and Martin/Williams, both Minneapolis, remain agencies for the Target discount chain.
Arnold will handle media planning as well as creative for Dayton's, with locations in Minnesota, Wisconsin, and North and South Dakota; Hudson's in Michigan; and Marshall Field's in Illinois, Indiana, Ohio and Wisconsin.
The three traditional department stores share a major in-house ad department and have assigned projects to agencies such as Martin Williams' Fame and Peterson Milla, all Minneapolis; and Leo Burnett USA, Chicago. Jeff Turner, creative director for all three chains, said the department store group will continue to work with those agencies on a project basis. Arnold's Volkswagen of America work led him to the shop.
Both Mr. Turner and Arnold said the agency's Talbots account does not pose a conflict because it is a specialty chain. Talbots agrees, according to a spokeswoman.
Other Target Corp. agencies include Kirshenbaum Bond & Partners for the Target chain's New York efforts and Suissa/Miller, Los Angeles, which recently broke a new branding effort for Mervyn's, Target's discount department store chain.
A spokesman for The Gap said Banana Republic and possibly other of its retail divisions are meeting with agencies. "We bring in talent as the situation dictates," he said, adding that the company was not likely to hire an agency of record. Indeed, one San Francisco agency executive called it a "fishing expedition."
Meanwhile, Penney's broke its new $200 million repositioning effort Sept. 10 on the Emmy Awards from new agency DDB Worldwide, Chicago and Dallas. Tagged, "it'sallinside," the campaign features a Penney's logo inside a square box.
The effort includes three spots. In one, a woman is shown in different outfits as she moves through the day. A second portrays a couple about to adopt an Asian child; the third shows off the store's shoe collection. Each ends with the visual moving inside the eye of a woman and the tagline. A mention also is made of Penney's strong online offerings as well as its catalog. (See Garfield's Ad Review, Page 75).
Chief Marketing Officer Stephen Farley said Penney's has decided to move to a simpler sales pricing structure, eliminating layered promotions in which the purchase of one item leads to a discount on others.
He said the company is taking a hard look at the return on investment even on items that are featured in its pre-print Sunday newspaper supplements. "We're demanding performance," Mr. Farley said.
Penney's also has revamped its merchandising strategy by centralizing its decisionmaking instead of leaving it in the hands of individual store managers.
Bob Scarpelli, CEO at DDB Worldwide, Chicago, said the campaign's goal is to get consumers to reconsider J.C. Penney. "We know what's at stake here," he said.
The campaign breaks just before the arrival of Penney's new CEO, Allen Questrom, a turnaround expert credited with bringing back Federated Department Stores from bankruptcy and Barneys New York from near bankruptcy.
"Their only hope is Questrom's coming," said Mr. Barnard.
Contributing: Kate MacArthur