Lowe Outlines Turnaround Plan

NEW YORK Interpublic Group's Lowe, in an effort to turn itself around, will cut 47 offices worldwide, broaden its marketing offering and transform its planning function to include new ways to gauge the effectiveness of creative ideas, CEO Stephen Gatfield and chairman Tony Wright said on Monday. Gatfield and Wright, who outlined the plan during a daylong investors' conference that IPG hosted in New York, said the new Lowe will emphasize eight "hub" or core markets (U.S., U.K., France, Brazil, China, India, Sweden and Thailand), though it will maintain 36 offices around the world, including seven in which it has a minority stake and 10 that are shared with other IPG agencies. The other 19 are majority owned. Lowe currently has 83 offices.To broaden its service offering, Lowe will partner with sister agencies such as Momentum, Initiative, Draft, Jack Morton and R/GA, Wright said. No mergers or exclusive alliances are planned, however. Rather, Lowe will tap into such agencies for pitches and to meet the needs of existing clients.Planners from IPG's Marketing Accountability Partnership also will be added to Lowe's core offices, beginning this year in New York and London, according to Wright. Those planners, who will work in tandem with account planners and media channel planners, are charged with measuring idea effectiveness through the practice of econometrics.Lowe's 40-minute presentation to investors and industry analysts came toward the end of the conference's morning session, after top executives from Foote Cone & Belding and McCann Worldgroup each gave broad overviews on their offerings, market strategies and clients. The presentations were chockful of PowerPoint slides, buzzwords and video clips, leaving just a few minutes for questions on each. And although agency CEOs were front and center, they shared the stage with IPG CEO Michael Roth, who, at times, interjected his own answers to questions posed to his operating heads.After Lowe's presentation, Roth cited the agency's talent and creative ability as reasons why it remained important to IPG. At the same time, however, he acknowledged the skepticism of many analysts."Most of you have already asked me this question: 'Why don't you put a bullet in Lowe already? Why are you dealing with all these issues? Why not break up Lowe, disperse it among your many strong networks and be on with it already?' " said Roth. "I hope you got the sense that if you put the right people in the right place, there's an opportunity here that you just can't ignore. And that's why we're spending the amount of time and effort to invest in Lowe. Because I do believe, as you can tell by the presentation here, that there is a way for us to utilize the strengths of Lowe in this marketplace and really turn it into a competitive advantage."Roth declined to provide a breakdown of Lowe's revenue or profit margin, when asked. In response to another question, Gatfield dismissed talk of a name change—"We have no plans to change the name of Lowe"—and said many of the hubs (New York and London, for example) were already in place. Elsewhere, such as in China, Brazil and India, Lowe is expected to increase its investments and install new management.In China, for example, the agency will increase its stake in a 50-50 joint venture to take control of the operation and hire new managers, Gatfield said.

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Lowe Outlines Turnaround Plan

Andrew McMains

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Andrew McMains