Financial difficulties are forcing Lois USA to recombine its two independent shops here.
"Our bank has informed us there's trouble with our bank agreements. We're in negotiations to sort them out," said Ted Veru, president of New York-based Lois USA.
Though Veru declined further comment, he noted that a previously plan to create two independent shops--Lois Chicago and Fogarty Klein & Partners 312--would probably not be completed.
The original decision to divide Lois EJL was aimed at solving a culture clash that arose when Lois merged its Chicago operations with Eisaman Johns & Laws in 1996, sources said.
At the time, Veru said the split would allow the network to handle competing business in the same market and build a national network for Houston-based Fogarty Klein & Partners [Adweek, March 22].
Veru said the Fogarty office "never really got going" and the split was unlikely to happen. "It will go back to the way it was," he said.
It was unclear how the shift will affect Lois' clients, which include Alberto-Culver and Turtle Wax.
Lois EJL billed nearly $250 million in 1998. The agency has recently lost several accounts, including the Chicagoland Chevy Dealers (due to consolidation by General Motors) and the Sav-on and Osco drugstore accounts.
Fogarty officials said they were unaware of any cash-flow problems and that the agencies were run as separate divisions.
--with J. Dee Hil