Wells' woes: Shop went from fame to faded glory

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The decline of Wells BDDP has seemed stunningly rapid in recent weeks, but the troubles that now threaten to topple the agency have been mounting for years.

Wells began traveling the twisting road that led it to Omnicom Group's door--and likely have numbered its days as a separate brand--in 1990, when Paris-based BDDP Worldwide bought the shop then known as Wells, Rich, Greene from legendary founder Mary Wells and management shareholders.

"How did the place fall apart? Very, very slowly and then all at once," said Paula Forman, who resigned as president of Wells in December after clashing with Chairman-CEO Frank Assumma, who himself has since had a nasty split with the agency. Ms. Forman wouldn't comment further.


At its peak in 1991, Wells posted gross income of $110 million, with billings of $929 million. Today billings have sunk to $200 million.

But in the years since billings peaked, the agency struggled with management and client woes that ranged from Continental Airlines' bankruptcy and IBM Corp.'s global consolidation to the dismissal of Chairman-CEO Ken Olshan, who had clashed repeatedly with the agency's French parent over Wells' direction.

Burdened by debt from the $160 million acquisition and with BDDP's revenues flagging, the French found a white knight in GGT Group, London, which bought all of BDDP in April 1997 for $174 million plus the assumption of debt then estimated at $83 million.

But management and client turmoil surfaced once again with a series of moves spectacularly capped by lead client Procter & Gamble Co.'s highly publicized termination of Wells in late January.


Just a week later, with its stock in the tank, GGT found a white knight of its own in Omnicom Group, which agreed to buy GGT for $234 million in cash.

Even that move didn't end the agency's woes. Heineken USA and TAG Heuer USA pulled their accounts after the sale, and Chase Manhattan Corp. went into review. And Mr. Assumma--who took control of Wells after Mr. Olshan's dismissal--was replaced when the deal was announced and has since filed an arbitration demand seeking $14.6 million in damages.

"This has been a whirling dervish situation for a while," said creative consultant and executive recruiter Susan Friedman.


Inside Wells and Omnicom, it is believed the agency will soon cease to exist as a stand-alone brand, being folded instead into an existing Omnicom network, such as TBWA Chiat/Day, when the deal closes in March. Neither agency would comment on that possibility.

Ironically, TBWA Chiat/Day President Bob Kuperman is a former Wells art director, and TBWA itself is what Wells once was--a new-business machine that creates ads people talk about.

Many former Wells staffers won't openly criticize their former employer, though privately they fume about what they call the management missteps that brought the agency to its knees.

Most Wells alums said BDDP's first mistake was failing to keep Ms. Wells around to put in cameo appearances before clients. Instead, it allowed her to withdraw, leaving behind a fragmented management team. In her wake, Mr. Olshan was anointed over Corporate Creative Director Charlie Moss and President Dick Hopple.


Ms. Wells, who refuses to be interviewed and is living in the south of France, gloomily watches from a distance what could be the last days of the agency she created, acquaintances say.

She opened the agency in 1966 after leaving J. Walter Thompson USA, New York. Born during the height of the creative revolution, Wells, Rich, Greene distinguished itself with a near-obsessive focus on relationship management and some now-legendary creative, including "I Love New York," "Flick My Bic" and Alka-Seltzer's "I can't believe I ate the whole thing."

"It was a good culture. It was the kind of culture outstanding creative people loved to join and work in," said Mr. Olshan, now a non-executive member of the board at Saatchi & Saatchi, New York. He would not comment further, citing the terms of his settlement with BDDP.

That culture, like the client base, eroded after Ms. Wells sold to BDDP.


One French advertising executive, who is a friend of both BDDP Chairman Jean-Marie Dru and former CEO Jean-Claude Boulet, said the Wells acquisition was a disastrous mix made possible by the junk bond mentality of the late '80s and competition among French agencies to establish U.S. beachheads.

A debt-strapped BDDP was hit hard by the early '90s recession on both sides of the Atlantic, sending revenues falling as clients pulled back spending.

Continental Airlines filed for Chapter 11 bankruptcy protection in 1991, leaving Wells holding a $7 million bill. As an unsecured creditor, it had no hope of getting paid in full.

"The French went nuts over that," said one former Wells executive.

In 1993, Continental moved to the Richards Group, Dallas. Shortly after, IBM consolidated its $500 million worldwide account at Ogilvy & Mather Worldwide. Sunoco and Miles Inc.'s Alka-Seltzer would also leave Wells during that period.

Wells scrambled, signing up clients like Toys "R" Us, Heineken and Bristol-Myers Squibb Co.'s Clairol. It also beefed up its management ranks, adding talent like Ms. Forman; former Executive Creative Director Linda Kaplan Thaler, who joined from J. Walter Thompson USA; and Douglas Atkin, former exec VP and director of planning.

But Mr. Olshan, already clashing with the French, had to deal with another crisis in April 1995 when Chief Financial Officer Tom Fagan and President David Sklaver were accused of funneling $500,000 of Wells funds to a production company in which they held a stake. Mr. Fagan was fired and Mr. Sklaver resigned, although settlements for the pair and Wells were subsequently reached and Mr. Sklaver was later exonerated by Wells as part of his settlement.


In October 1995, BDDP management dismissed Mr. Olshan by sending a fax to his home in Connecticut as he was leaving for temple with his family to attend services for Rosh Hashana.

Enter Mr. Assumma, introduced to BDDP management by recruiter Bonnie Lundt, who had placed him at Bates North America as president-CEO.

Ms. Lundt, who would later bring GGT and BDDP together, would not comment for this story, citing her relationships with BDDP, GGT and Omnicom.

Mr. Assumma's former colleagues at Bates--where the executive known for his quick temper earned the nickname "Teflon man" because of his ability to climb the ranks despite his perceived shortcomings--were amazed when he landed the Wells job.


"We were in a state of shock over how he could have parlayed himself into that position," one former co-worker said. "One person who had to meet with him regularly would always say, `Well, I'm going in for my daily abuse now.' He was belittling and condescending."

At Wells, Mr. Assumma's critics also said he spent too much time focused on the agency's move from its 57th Street headquarters to cheaper downtown digs and not enough on client relationships. And he never clicked with the management trio of Ms. Forman, Mr. Atkin and Ms. Kaplan Thaler.

The focus on clients deteriorated because of the infighting, and account losses became unavoidable, said present and former staffers. One former Wells executive said there was little attention paid to clients such as Ford Motor Co., ITT Sheraton Corp. and Philip Morris Cos.--all now gone from Wells' roster.


Ms. Kaplan Thaler, a key executive on Toys "R" Us, left in July 1997 to start her own production and advertising shop. Ms. Forman resigned in December. Soon after, Mr. Atkin also left.

Fearing P&G might follow Ms. Forman out the door, GGT Chairman Michael Greenlees stepped in. To Mr. Assumma's annoyance, he met with P&G executives and, separately, the P&G team at Wells. Mr. Greenlees was traveling and not available for comment for this story.

Unhappy being cast as the heavy, Mr. Assumma briefly hired publicist Dan Klores to protect his reputation. Shortly after, an item appeared in the gossip pages of the New York Post, saying Mr. Greenlees was trying to turn Mr. Assumma into a "fall guy" for Wells' problems.

Mr. Assumma did not return phone calls for this story.

The key P&G team, upset by the turmoil, quit on Jan. 21. The following day, P&G shifted $125 million in billings from Wells to Saatchi and Grey Advertising, both New York, and Leo Burnett Co., Chicago. The three Wells exec VP-managing partners who had resigned soon followed the accounts to their new homes.

P&G said the firing of Wells was a hard thing to do and that it was brought on by no single person. But P&G had not been a happy client for some time, dating back to the departure of Mr. Olshan, affectionately known as "Kenny" at P&G's Cincinnati headquarters.

P&G even took the unusual step of publicly coming down hard on Wells, with Bob Wehling, senior VP-advertising, market research and government relations noting, "We value long-term relationships, but you have to have relationships with human beings."


At least one industry executive questioned why GGT didn't act sooner to smooth over the relationship with Wells. But Mr. Assumma had a good relationship with BDDP's Mr. Dru and GGT is known for not interfering in its agencies' affairs. BDDP did approach former Y&R Advertising New York President-CEO Steve Davis about taking over as chairman-CEO of Wells two weeks before P&G walked. Mr. Davis was installed as Mr. Assumma's successor on Jan. 28, the same day Omnicom announced its acquisition of GGT.

Mr. Assumma has since filed an arbitration claim against GGT, seeking $2.6 million for breach of contract, $10 million for loss of future earnings, and $2 million in damages for alleged defamation.

Mr. Davis was brought in to stabilize the agency. But industry speculation about the stability of the accounts of remaining clients such as Hertz Rent A Car and Toys "R" Us continues. Toys "R" Us denied the account was moving, while Hertz didn't return calls.

Describing Wells' unpleasant odyssey, one executive there said it "was almost classic, like the story of Job. You looked up in the sky and said, `God, what do you want from this agency?' "

Contributing: Jack Neff, Bruce Crumley, Juliana Koranteng, James B. Arndorfer, Alice Z. Cuneo, Jean Halliday, Laura Petrecca, Pat Sloan

Copyright February 1998, Crain Communications Inc.

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