Arnold's future dims: Havas executives will hold Paris summit on reorg plans

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Havas' top brass will hold a series of meetings in Paris over the next few days to hammer out details of the company's latest reorganization. The finalized plans, which will ultimately see Euro RSCG Worldwide gain significant portions of Arnold Worldwide Partners business, will be unveiled Sept. 18 with the French holding company's 2003 results.

The reorganization is expected to result in between 25 to 50 layoffs at corporate headquarters and at Havas agencies with duplicate functions. Havas Chairman-CEO Alain De Pouzilhac has already said he wants to focus efforts on Euro RSCG Worldwide while keeping Arnold Worldwide as a "creative alternative."

According to three Havas executives, Arnold Worldwide is expected to lose at least two of its units: direct-marketing firm Brann Worldwide and PR agency Magnet Communications, which counts IBM Corp. among its clients. The plan is to boost Euro RSCG Worldwide's marketing-services expertise as it attempts to provide clients with a single integrated offering. Both Brann and Magnet are expected to move under the Euro RSCG Worldwide umbrella. Abernathy MacGregor Group, a high-end corporate PR agency, which reports directly to Havas senior management, may also follow suit depending on the outcome of contract negotiations.

retirement question

Arnold's CEO Ed Eskandarian refused to comment on the changes until the plans are complete, but dismissed speculation that he will retire in January, saying, "I'm not retiring, I'm sticking around." Arnold is looking at a slimmer future and is reportedly holding talks with its U.K. office WCRS, which is planning a buyback. In the U.S., Arnold is viewed as the stronger creative shop of the two and is involved in a pitch against Publicis Groupe's Kaplan Thaler Group for Pfizer's Celebrex account in the U.S.

Havas' No. 2 executive, Bob Schmetterer, is known to be looking to boost the senior management ranks at Euro RSCG Worldwide, which will soon house Havas' main marketing-services capabilities. Talks to create a global chief marketing officer role for Brett Gosper, former partner at London-based Euro RSCG Wnek Gosper failed when he joined McCann in August as general manager in New York. Separately, Mr. Schmetterer had been discussing another role with former McCann-Erickson Worldwide CEO James Heekin. Havas executives said these talks have ended and that Mr. Schmetterer is now tossing around the idea of hiring a top creative to sit atop the agency, among other ideas. A Havas spokesman said he had no comment on the reorganization or on talks with prospective candidates.

Meanwhile, the future of Havas' Black Rocket in San Francisco hangs in the balance. Black Rocket lost longtime client Yahoo! last month and its future is said to depend on the outcome of a handful of new-business pitches. Separately, Mr. De Pouzilhac has said he intends to bolster the firm's media planning and buying network MPG. A Havas executive said a joint venture or an acquisition is being considered.

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