| Fallon New York is being closed as its president and top creative quit to start their own agency.
Fallon made the announcement in a news release this afternoon and said that New York employees will be offered jobs in Minneapolis, the Publicis Groupe agency's headquarters. The office has a staff of 35 people.
Clients have been notified of the change, and the agency is working with them to determine appropriate transitions for their business, according to the statement.
The release said office President Anne Bologna and top creative Ari Merkin approached agency Chairman Pat Fallon earlier this year and expressed their desire to launch a venture. That prompted Fallon's decision to stop running an office in New York.
NY: 'Not a necessary part of Fallon'
"While we have loved doing business in New York, and have a great group of talent, the truth is that New York is not a necessary part of Fallon's U.S. offering. We believe our clients will be best served by a single office," Mr. Fallon said in a release.
The New York office enjoyed a strong creative reputation for its work for clients including Virgin Mobile and Time.
In an interview, Ms. Bologna said Mr. Fallon was "visibly disappointed" when she and Mr. Merkin told him of their intentions. She wouldn't describe their plans except to say their new agency would be "less traditional" than typical ad agencies.
Ten years in NY
Fallon has had a New York office for 10 years -- at one point partnering with Andy Berlin -- and the branch has gone through repeated management changes. The decision to finally close it was driven by strategic, not financial decisions, Mr. Fallon said. Running a single office makes the agency more streamlined without the distraction of developing a New York facility that was blocked out of many reviews because of conflict issues with Minneapolis.
Fallon opened the New York office because it believed it needed a presence in Gotham. But the fact that Citibank is the biggest account at the Minneapolis office shows that New York marketers are willing to make the trip to the upper Midwest.
"The strategy as it turns out was flawed," Mr. Fallon said. A single office "simplifies our offering" and is strategically sound.
But Mr. Fallon conceded the agency likely would have kept the office open had Ms. Bologna and Mr. Merkin not decided to bolt. "I can't say that we should have," he said.