Starwood shakes up marketing operations

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A reorganization of Starwood Hotels & Resorts Worldwide's global marketing operations will end the tenure of Chief Marketing Officer Keith Ferrazzi, who helped craft the new structure.

Under the reorganization, Starwood will peel off its North American marketing operations from its global marketing division, allowing for increased focus on the region where the bulk of its properties are located.

COTTER SPURS CHANGE

The move was propelled by Starwood's new chief operating officer, Robert Cotter, who wants to strengthen the North American operations. Mr. Cotter, 48, was named to the post last month, from president-international operations.

Starwood operates some 700 hotels in 80 countries, including 438 in North America, under such well-known brand names as Sheraton, Westin and St. Regis. Amid an overall downturn in hospitality stocks, Starwood's price has hovered around $20 a share, down from a 52-week high of about $37.

"They are making the right business decisions and they're just not being rewarded at this time," said Keith Mills, an analyst with Paine Webber who upgraded the stock when Mr. Cotter was elevated.

FIVE UNITS

With the restructuring, North American sales and marketing plus human resources now will function as a standalone unit along with four other geographic regions: Asia-Pacific, Europe, Latin America and Africa-Middle East. Bob Moore was named exec VP-sales and marketing of North America while retaining his title of senior VP-global sales.

Functions such as the loyalty-building Starwood Preferred Guest program, Internet marketing, and customer-relationship and database management will remain in a global division headed by Tad Smith, 34, senior VP-e-commerce development.

Mr. Cotter and Mr. Ferrazzi worked together on the restructuring, a Starwood spokeswoman said. The 33-year-old Mr. Ferrazzi, who was the chief marketing officer at Deloitte Consulting before joining Starwood in May, was offered the chance to head up the North American marketing operations or the separate division in charge of global brand strategies after the restructuring, executives with knowledge of the situation said.

But in a statement, Mr. Ferrazzi said: "The remaining roles were significantly different than the role I chose to assume a year ago."

Mr. Ferrazzi will depart at the end of the month. It was unclear what his next job will be, but an executive with knowledge of the situation said Mr. Ferrazzi was approached by a company conducting the search for a chief marketing officer at Amazon.com.

An Amazon.com spokeswoman declined comment. In January, Jileh Bisharat, Amazon's VP-marketing, resigned after about six months on the job, saying she wanted to return to San Francisco, where her family resides. Ms. Bisharat, who says she is involved in the search for her successor, said no decision had been reached.

Mr. Ferrazzi led Starwood's review last year for the estimated $50 million global account for Sheraton Hotels & Resorts won by DDB Worldwide, New York. He also played a role in the recent relaunch of the Westin brand as more upscale and distinct from Sheraton.

EFFECT ON SHOPS UNCLEAR

It's unclear what effect Mr. Ferrazzi's departure might have on Starwood's agency relationships. DDB handles all company brands except Sheraton Four Points, which is at Ogilvy & Mather, Atlanta.

Peter Tate, president of DDB, New York, said he was confident the agency's relationship with Starwood would remain strong.

Besides the recent relaunch of Westin, Mr. Ferrazzi last fall helped introduce a special Heavenly Bed available only in Westins. He also helped launch Sheraton's new "Who's taking care of you?" campaign from DDB that began in print in November and is expected to move to TV soon.

"I thought he was a good client," DDB's Mr. Tate said. "He had vision."

Contributing: Alice Z. Cuneo

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