By David Gianatasio and Judy Warner
BOSTON--As dozens of Houston Herstek Favat staffers cleaned out their desks last week following a round of layoffs, chairman Doug Houston was assessing various alternatives to help reverse his agency's sinking fortunes, sources said.
In addition to a deal with former Houston Herstek partner Don Effler to unite the shop with the Dentsu-owned Colby Effler in Los Angeles (Adweek, June 9), Hill, Holliday, Connors, Cosmopulos in Boston was said to be interested in making an offer. Houston has vowed to remain independent and said a 'spirit of rebirth' now reigns at his scaled-down organization.
Hill, Holliday chief executive Jack Connors could not be reached for comment. He is said to covet several accounts still handled by Houston Herstek, including footwear giant Converse in North Reading, Mass., and the Massachusetts Department of Public Health's Tobacco Control Program. The DPH would call a review if Houston Herstek's ownership were to change, said department representative Sean Fitzpatrick.
As many as 40 Houston Herstek staffers have been let go in recent weeks, following the loss of $100 million in billings in little more than a month, sources said. Doug Houston last week confirmed that 19 employees were laid off, but he said no additional cuts were anticipated.
However, sources inside Houston Herstek said an additional 20-30 staffers were told they could only keep their jobs for a few more weeks while the shop works on new business efforts. Increased work from client Midas International--which has no lead agency on its $25 million national account--may be in the offing, sources said.
The Boston shop now employs 71 people, according to Houston. The agency reported having 175 employees as 1997 began, but sources said that figure was inflated and probably peaked at 120 in January.
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