In a short statement, the agency said: "The issue that has come between us is not an advertising issue, but a financial one."
The agency refused to expand on the
Ad spending slashed
The news is unlikely to inspire potential new agency partners for the retailer, which said it had slashed administration costs, including advertising spending, when it reported first-quarter 2003 results.
TBWA began work for Kmart in 2000 and had remained with the retailer as it went through three separate CEOs, numerous marketing chiefs, Chapter 11 proceedings and the legal problems of Kmart spokeswoman Martha Stewart.
Kmart did not return numerous calls for comment.