Just days after the paperwork was completed on EvansGroup’s acquisition of the DDB Needham office in San Francisco, Orchard Supply Hardware, the estimated $6.5-million account that served to anchor the shop, is in talks with at least three other ad agencies.
Sources familiar with the San Jose, Calif.-based retailer say the company has contacted Hal Riney & Partners, Hoffman/Lewis and Young & Rubicam, all of San Francisco, and invited them to make capabilities presentations.
The action is believed to have been initiated at the urging of Orchard’s new executive vice president Brad Tukey, who joined the company less than two months ago.
The possible loss of the account, the agency’s largest and most visible, would be a significant blow to EvansGroup/S.F., which had acquired DDB/S.F. under the rationale that it would give the agency the bulk and muscle to compete for bigger pieces of business.
Evans, with just $16 million in billings before the merger, believed that its size shut the shop out of most reviews.
According to EvansGroup, DDB’s S.F. offices had billings of $32 million at the time of the merger, creating a new firm with total billings of $48 million. But the bulk of those billings came from media-buying assignments from movie studios, and accounts that include creative assignments represent a smaller piece of the DDB pie.
Joe DiRocco, vice president of marketing for Orchard, said about six months ago he had raised some concerns over dwindling resources at the agency as it became evident that DDB was readying to pull out of San Francisco. He said, though, the merger with EvansGroup has resolved those concerns and that the firm will remain Orchard’s agency.
While DiRocco insisted the company had not initiated nor was contemplating a review, he did acknowledge that the company was talking to a small number of agencies. He explained that every two years the company tries to sit down with two or three firms to make sure such issues as compensation are in line with what is happening within the industry.
‘We’re essentially speaking with some agencies to see if what we’re doing is competitive,’ he said.
Last week, EvansGroup spokesman Steve Bryant said Orchard had assured the agency that no review was taking place and that the company had met with the client to discuss advertising plans for 1994 last week as well.
In a separate review, EvansGroup/S.F. is a finalist in the $725,000 Monterey Bay Aquarium account. DDB/S.F. is the incumbent on that business.
The accounts DDB Needham/S.F. brought to the merger table as estimated percentage of total: Orchard Supply Hardware, 20%; Movie Studio Media Buying Assignments, 56%; Monterey Bay Aquarium, 3%; Caltrans, 7%; Interline, 12%; Cal State Auto Assoc, 1%; World Explorer Cruises, 1%.
Copyright Adweek L.P. (1993)
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