Deutsch to Close Boston Office

Observers attribute the failure of Deutsch’s local office, set to close its doors next month, mainly to the weakened economy, which began to make new-business opportunities scarce just as the outpost came on line a year ago.

The nine-person operation is resigning its one client of note, grocery delivery company, which spends about $2 million on ads. Client officials did not return calls.

Kristin Volk and Kathy Kiely, the former Arnold executives who launched the office for New York-based Deutsch last summer, referred questions to the agency’s headquarters.

“Those are a couple of talented people [who] never seemed to get any momentum. If factors aren’t right … you can be put down in a heartbeat,” said Arnold alum Steve Connelly, president of Connelly Partners in Boston.

A spokeswoman for Deutsch, a unit of the Interpublic Group of Cos., said Volk, Kiely and other staffers may be offered jobs at Deutsch or other IPG properties. The spokeswoman attributed the impending closing “to an overall softness in the Boston marketplace and the tighter economic conditions.”

Despite success in New York and Los Angeles, Deutsch never generated much excitement in Boston. Executives cited Deutsch’s apparent “arrogance”—noting Kiely’s remark that the agency intended to “kick some old-boy butt”—as a problem. Plus, “a local outpost of a national agency never does well in Boston,” Connelly said.

Industry consultant Skip Pile said “inexperience with business management survival technique in a rapidly softening economy” was a likely factor in the failure of Deutsch and appears to be nagging other shops as well. In light of recent regional closings—KGA Advertising and Leo Burnett Technology Group have also succumbed—Pile predicted a “long, hot summer,” with shops scrambling to survive.