Just two years ago, visitors to the Fifth Avenue loft offices of Geer DuBois saw all the signs of an agency winning a second lease on life. Onc" data-categories = "" data-popup = "" data-ads = "Yes" data-company = "[]" data-outstream = "yes" >

Death of an agency: who and what killed Geer DuBois? By Noreen O’Lear

Just two years ago, visitors to the Fifth Avenue loft offices of Geer DuBois saw all the signs of an agency winning a second lease on life. Onc

“Everything’s thriving and the work is dynamite,” gushed vice chairman/executive creative director M. Rodney Underwood, one of two former Ammirati & Puris execs Geer had hired. “There’s an upward momentum here,” said the other recruit, president John Hayes, in the more sober tones of a suit. “If it were a desperate agency, I wouldn’t be here.”
Indeed, even the sweeping views from GDB’s sunny, window-filled offices–of trendy Flatiron neighborhoods and the Empire State Building-gave Underwood and Hayes reason to believe GDB had everything going for it in a city that reinvents itself every morning. From his 17th floor offices, this was also Peter Geer’s view of the world. But by 1991 it seemed no longer to be the way he saw his agency.
Increasingly that year Geer–an urbane, 62-year-old intellectual who once enjoyed roaming the hallways chatting with staffers–became a virtual recluse in his office, standing alone for hours painting highly conceptual canvases. He was seen less and less at the agency. Finally, last spring, he stopped coming in altogether. No retirement memo, no farewells, no champagne toasts. Staffers still puzzle over Geer’s mysterious departure from an agency his parents had rounded nearly a half-century earlier. Only a plaque the enigmatic Geer hung outside his office hinted at what was on his mind: “If we don’t change direction, we’ll end up where we’re going.”
What most of those GDB employees didn’t know is by the end of 1991, Peter Geer had already arrived at a point of no return. He had just been told of a computer billing error that would cost the agency its $25-million Brown & Williamson account. The cigarette maker provided a third of GDB’s profits. Geer declined interview requests, but sources dose to him say he decided then to shutter the shop. From that moment, the clock began ticking on what would become the biggest agency bankruptcy since Lennen & Newell in 1972.
Shortly after B&W’s departure in January 1992, Hayes left to become president of Lowe & Partners’ New York office. Four months later, former top J. Walter Thompson executive Steve Bowen took his place, coming into GDB with an option to buy the agency along with Underwood and other managers. They already knew another flagship account, Jaguar Cars, would soon be gone. But the agency bought time by keeping up a good PR front in its “fight” to keep Jaguar during a summer-long review. (The $20-million account went to Ogilvy & Mather.)
Inside GDB, the agency was frantically trying to cut costs, lower debt and reconfigure itself as a new entity. By year’s end, GDB’s debt had been more than halved to $4 million, and the company had managed to operate a number of months in the black–its first profitable period since 1988. Now if GDB could only win a new piece of business, hold on to its largest remaining account, $13-15-million Paddington Corp., and shave a little more debt, Bowen and his group would be ready to buy an agency more certain to survive.
That chance never came. On a Thursday in late January, Bowen’s group met with Paddington. By the following Tuesday, GDB was dead. Paddington fired the agency and moved its liquor brands to Lowe and Saatchi & Saatchi. “Staying afloat takes a lot of time and energy that can’t go toward clients’ business, and we weren’t getting the same quality of service or attention,” says Roger Sione, senior vp/marketing at Paddington, which had been with GDB since 1987.
For Bowen, the purchase of GDB was contingent on Paddington’s continued support of the agency. Bowen considered his options, including such 11th-hour measures as factoring receivables. But in the end he returned to Geer’s decision of a year earlier. Just days after the loss of Paddington, Bowen announced GDB would be liquidated, leaving 60 staffers on the street and media creditors holding $4.7 million in unpaid bills. (Once GDB collects its own outstanding bills, the amount of unpaid media debt is expected to be reduced to $3 million.)
Some GDB insiders say Sione, a vocal supporter of the agency in the past, pulled the trigger after discovering his media dollars were being used to pay off debts of former GDB clients. “The agency had little choice,” says one source. “They just had to keep rolling over Brown & Williamson’s and Jaguar’s bills, which they could do because of Paddington. It’s not unusual to have an agency with outstanding media debt. Geer DuBois’ problem was they never had enough time to get in front of the business.”
Even so, many in the media community were surprised when GDB shut its doors in early February. By whatever means, the agency was still current on its bills; in the universe of troubled Manhattan shops, GDB was not the most obvious disaster waiting to happen. Even after the loss of 70% of its billings, GDB still had $45 million in business from clients like Northrop, Meridien Hotels, Dreyfus and the New York Zoological Society. Many observers considered Bowen’s interest in the agency to be a solid bet on its future.
They were wrong. While the media department played Ponzi-like schemes with billings, agency principals desperately sought capital and a reason to be. In the end, GDB didn’t have one.
GDB was an anachronism long before Peter Geer closeted himself in his office, bored with advertising. In death, GDB offers a revealing glimpse of the life of an agency era gone forever: a time of 15% commissions, double-digit inflation, automatic hikes in annual client budgets and little competition for marketing dollars. Those forgiving economics bankrolled a lot of forgettable fasttalking, long-lunching agencies. But it also allowed for a blossoming of small New York creative hothouses, whose eccentric legacies may be their most enduring advertising.
In the face of industry consolidation, Geer was proud to own one of the last such shops. GDB was rounded in the depression by his father, Solon, an out-of-work concert pianist and architect, and his mother, Eve DuBois, a public relations writer. Son Peter was a Yale graduate at 19, an Oxford scholar and gifted linguist with a particular interest in Japanese language and culture. He apprenticed as David Ogilvy’s assistant in the early ’50s, and in 1964 he inherited GDB, then a struggling industrial public relations firm. That would change quickly.
“Peter thought a major part of building a company was creating a place where interesting, unusual, intelligent people could work together. He often said it was like building a salon,” remembers former staffer Tom Cotton, now svp/management representative at Backer Spielvogel Bates/N.Y.
Indeed, at its peak in the late ’70s and early ’80s, GDB had on staff an aeronautic engineer, lawyer, architect, classical painter, ne’er-do-well writers, poets and uniformed street sweepers. Geer, a copywriter, served as that unlikely group’s creative leader and transformed the agency into a hot consumer advertising shop. They turned an oversized red-andwhite Life page into a symbol for the magazine; made Peek Freans into “a very serious cookie” for adults; wrote “Of Course, of Course” for Barnes & Noble; and came up with the calamitous cartoon campaign in which the soon-to-be-victim says, “My insurance company? New England Life, of course.”
Clients were resigned for rude.ess, and Geer discouraged closed-door politics: All of GDB’s light, airy offices had sliding glass patio panels. Impromptu meetings were as likely to happen in alcoves shaded by Amazonian vegetation or in the agency’s sunken Japanese garden.
GDB was a trailblazer in another way: In 1981, it became the first agency to move into the then-anonymous area around Manhattan’s landmark Flatiron building. New York ad agencies were still confident in their role as arbiters of style, and GDB popularized the faded commercial splendor of lower Fifth Avenue. Its staff discovered watering holes from another century, like the Old Town bar and McSorley’s Old Ale House, and office routines included Friday lunchtime bowling breaks at the Bowlmor. GDB even took out a three-page ad announcing the move in the Sunday New York Times Magazine. Soon agencies like Ammirati & Puffs and Chiat/Day followed, along with fashionable boutiques, night clubs and restaurants.
“Peter was a lousy businessman,” muses one former employee. “But he had a helluva instinct for real estate.” When GDB opened on lower Fifth Avenue, it had Sperry & Hutchinson, the green stamp company, as a neighbor. When the agency closed, Annani was next door.
Indeed, Geer seemed interested in business only to the extent it supported the agency’s lifestyle. He was extremely generous in severance deals and maintained a firm stance against layoffs. He liked dealing only with top marketing execs and didn’t much cultivate second-tier client people. As a result, GDB developed a reputation for losing clients who would change agencies but continue to use GDB-created campaigns. The agency also had a foot in the door at some sterling marketers–handling business-to-business work for IBM and advertising for Mercedes-Benz trucks–but lost both those accounts.
When the agency’s president Richard Seclow, a former O&M exec, left advertising in 1984, Geer set out to groom a generation of possible successors. In 1986 his youthful lead contender, marketing services director Brian Sherwood, died suddenly while running in a Central Park marathon. Geer was back to the drawing board again, with well-regarded executive committee members John Allen and Doria Steedman in the running. As the decade drew to a close, however, he told the press that he was uncomfortable with his choices.
So using a headhunter, he went outside the agency. He made it clear money was no object, and he considered “the kind of creative names that would require a change of the name on the door,” remembers someone close to the search. Geer ultimately chose Underwood, a copywriter recently cut loose from the agency next door, Ammirati & ha’is. Geer was absolutely taken with his 38-year-old creative chief, who seemed an improbable choice.
It wasn’t that Underwood lacked enthusiasm for advertising and GDB. But Geer, married to a prominent Jungian psychologist, had usually surrounded himself with staffers who knew more about Proust than Procter. Underwood had attended college on a diving scholarship and broke into advertising while washing dishes in a vegetarian restaurant. Even after moving to Greenwich Village, he reminded reporters his favorite hobby was surfing.
Underwood did improve GDB’s lackluster creative and recruited the likes of Martyn Straw from Ogilvy & Mather. He spearheaded many of the agency’s account wins in 1991, adding clients like Austin Nichols & Co., Yoo Hoo chocolate drink and the Zoological Society. He also seemed as interested in PR as in new business, becoming the force behind GDB’s coverage in the press. Staffers agree the place had changed, all right, but not necessarily for the better. They recall that after Undewood joined GDB, one of the first things he did was replace the clear doors in top executives offices with frosted glass.
“One day after the new team arrived, Peter called me and said he had no one in the agency to talk to on a peer level anymore,” says Shep Kurnit, an agency contemporary of Geer’s who is now retired. “No one where he felt stimulated by their intelligence. I thought that’s a strange thing to say because you don’t go into advertising for intellectually stimulating conversations. But that was Peter. He was always a bit of an aesthete. He’d climb into a airplane, go to Japan and contemplate his navel. I don’t know if he was ever fight for this business; he was a kind of mystical guy.”
There was no mystery about GDB’s mounting problems, however. The agency may have been a pioneer in the Flatiron district, but it made straight-line growth projections and agreed to an expensive lease. As a result, the rent on GDB’s lorn- floors ballooned from the teens to the mid-to-high $20s per square foot, costing the agency as much as $2 million annually. Locked-in severance payments were also draining income. Sherwood’s widow, for instance, was reportedly promised $100,000 a year until her children reached 21. Geer’s generosity with staffers caused other headaches. His reluctance to make layoffs resulted in a bloated payroll wildly out of sync with industry standards of one employee per million dollars in billings. When GDB’s new management took over, the agency had a staff of some 250 for $120 million in billings.
What’s more, the company had also defied conventional logic when it took out a bank loan to buy, rather than lease, a computer system for nearly $1 million to upgrade media accounting. Hayes was the executive who discovered the glitch in the system, which ultimately caused GDB to overbill B&W by hundreds of thousands of dollars. The cash-strapped agency had to pay back the amount with interest.
Most likely Hayes also discovered the agency’s perilous balance sheet. GDB’s last profitable year was 1988, when it earned just $79,000 on gross income of $16 million and overall billings of $120 million, insiders say. Losses in recent years often broke seven figures.
Underwood, in his 1991 press tour, assured reporters he and Hayes had taken equity positions in GDB. But insiders report they never exercised their options. It’s easy to see why: GDB’s closely-held stock slid from $78.43 per share in 1989 to $8.48 a year later, according to those agency insiders. By 1991, it was worthless, according to one shareholder. (The shares are split among 21 stockholders, with Geer owning 44.9% and controlling all voting shares.)
The only value left at GDB will be determined by Abbott Jackson, the auctioneer brought in to sell the agency’s furniture and equipment. He did a preliminary asset appraisal a couple of months before GDB’s fate was officially sealed. Not wanting to alarm employees, Jackson waited until after work hours to visit. He found an office full of staffers who were still working when he left.
“What kind of business is this that people are willing work those hours until the end?” Jackson asked a reporter months later, touring cubicles littered with wilted flowers, posted jokes, empty champagne bottles and remembrances of wins, losses and friends. Offices containing financial files and documents were roped off with yellow tape, like a crime scene under investigation. Even though the piles of Apple computers, telephone sets, VCRs and TV monitors looked fairly new, the agency’s trustees estimate the auction will bring in only $100,000-$150,000.
As Jackson’s employees tagged and labeled items like kindling for a fire sale, the agency bore little resemblance to the space honored in a 1983 Madison Avenue article about its design. At the time, GDB was held up as a model for the hip, new downtown agency order. Geer was quoted as advising the architect: “I’d rather have this place look as if we’ve run out of money than as if we’ve run out of brains.”
And at the end, out of luck.
Copyright Adweek L.P. (1993)