WPP Shutters United in London

Clients Will Move to Sibling Grey

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LONDON (AdAge.com) -- WPP Group has closed the struggling London office of its United micronetwork but has not given up hope of a London agency in the long term. The remaining U.K. clients and staff will move to sibling agency Grey.

'No knee-jerk reaction'
United Chief Operating Officer Laurence Mellman said: "I accept the need for a presence in London, and we will look to build or buy. But there will be no knee-jerk reaction."

Mr. Mellman said United London had been a "troubled" agency in its various forms for a number of years and had been "fairly horrific financially" recently. The agency, back when it was called Red Cell, merged with Howell Henry Chaldecott Lury, a leading U.K. agency in the 1990s that was in decline when acquired by WPP in 2003.

When the Sky fell
"It is sad but there has been a continuous decline through various management changes which culminated in the loss of [satellite broadcaster] Sky, which was a significant body blow," Mr. Mellman said. The Sky account was worth $150 million. "It meant that there was a lack of critical mass because the agency was built around Sky, and didn't have the ability to get out of the tailspin."

The 25 employees of United London are in negotiations about who will go to Grey. Mr. Mellman said the remaining United London clients are happy to move to Grey "as long as they get good work from the same people they work with currently."

Jim Kelly, who, along with Robert Campbell, was parachuted into United London in January 2006 as joint managing partner with the mission of turning the agency around, is still in negotiations about his future. Mr. Mellman said WPP is keen to keep Mr. Kelly in the group, but Mr. Campbell has officially resigned.

Network healthy
United London's remaining accounts include the Department of Health, the Early Learning Centre, TheLondonPaper and Masterfoods' Tracker snack bars.

Mr. Mellman added, "We have nine agencies around the world which are in good health and the network as a whole is doing well as testified by recent wins." The office in Milan recently won Vodafone Italy's account, and Berlin Cameron United in the U.S. has picked up Heineken.

Companies have found it difficult to operate as a collection of independent creative agencies. Havas-owned Arnold tried to build an international network, then retrenched and kept an assortment of creative shops overseas. Now Arnold's French and Canadian offices report directly to Havas, and its agencies in Italy, Spain and Australia have become part of Havas-owned Euro RSCG Worldwide.
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