Sears Holdings Begins Agency Review

Roster Shops Y&R, DraftFCB Said to Continue Work on Sears, Kmart Brands

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NEW YORK ( -- After years of relative calm, Sears Holdings agency roster appears to be in flux.

Executives with knowledge of the process said the retail giant is reviewing agencies for its Sears and Kmart brands. The retailer is looking to build out its stable of agencies, these executives said, though WPP's Y&R and Interpublic Group of Cos.' DraftFCB will continue to work on their respective Sears and Kmart accounts.

Sears Holdings was tight-lipped about the review. "As a normal course of business for Sears Holdings, we occasionally review our marketing relationships," a spokesman wrote in an email to Ad Age. "Out of respect for those involved in the process, we will decline additional comment until it has run its course."

There has been some minor movement on the agency roster in recent months. In November, Sears said it had tapped Boston-based independent Modernista to handle a digital initiative for the brand's fitness business.

It's surprising, however, that there haven't been more changes to that roster in recent years, given the brands' struggles and turmoil in the C-suite.

Both brands have been struggling for relevance, though Sears has suffered more than its sibling. During the all-important month of December, Kmart reported that sales at stores open at least a year rose 2.3%, while Sears' domestic locations reported a 6% decline. During the most recent quarter, ended Oct. 30, Sears Holdings reported a net loss of $218 million. Domestic same-store sales fell 0.7% at Kmart and 8.2% at Sears during the period.

In August, Sears Holdings tapped David Friedman as its new senior VP-president of marketing. Mr. Friedman hailed from Razorfish, where he was president-Americas. Mr. Friedman is the retailer's third head marketer since Edward Lampert took control of the company in 2005. Richard Gerstein, now senior VP-strategy and worldwide marketing at Hewlett-Packard, and Maureen McGuire, who was personally recruited by Mr. Lampert, preceded him.

There's also been numerous changes in the leadership ranks at Sears Holdings' individual brands in the last few years. Mr. Gerstein, then Don Hamblen, who departed a year ago, helmed marketing at the Sears brand. Sears is now without a chief marketer. Meanwhile, on the Kmart side of the house, Bill Stewart departed in mid-2008 and was replaced by Mark Snyder. Mr. Snyder remains the chief marketer for Kmart and reports to Mr. Friedman.

Any change to Sears' relationship with Young & Rubicam would come as a blow to the WPP shop. The retailer ended a 43-year relationship with Ogilvy & Mather Worldwide in 2005, when it consolidated its account with Y&R. In 1996, after managing the Sears account between its Chicago and New York offices, Y&R consolidated the retailer's work in Chicago. Notable work from the agency includes the "Softer Side of Sears" campaign, which ran from late 1993 until 2000. Through October, Sears spent $322 million on measured media, according to Kantar. It spent $454 million in 2009. Y&R referred calls to the client.

Kmart has been working with DraftFCB since 2007, when the retailer split from Grey Worldwide and sibling G2. In recent years, creative has revolved around Mr. Blue Light, a nod to the retailer's Blue Light Specials. Through October, Kmart spent $156 million on measured media. It spent $224 million in 2009. The agency could not immediately be reached for comment.

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Maureen Morrison contributed to this report.

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