Sears Taps Finalists: Compensation Battle Could Be Next

Consultant Morgan, Anderson & Co. is well on its way to fulfilling at least half of its mission for client Sears Merchandise Group with the announcement last week of finalists for the $30-million apparel business.
Sears picked Young & Rubicam, Hal Riney & Partners and Wells Rich Greene BDDP, all N.Y., to vie for its apparel business. Gone from the review are incumbent Ogilvy & Mather/Chicago and Saatchi & Saatchi Advertising/N.Y.
However, sources said last week said N.Y.-based Morgan Anderson has another assignment from Sears – to analyze compensation levels for both Ogilvy & Mather/Chicago, which retains an estimated $200 million in Sears retail business here, and Focus Media/Studio City, Calif., which buys certain media for the retailer.
‘O&M just went through hell to pitch the account and now Morgan Anderson is back at their door beating them up on compensation,’ said one source close to O&M.
A source involved in the apparel review said compensation never came up during the presentation process, but may have come up in closed door sessions and would likely become a major issue once the new agency is picked.
Executives at O&M and Focus Media declined to comment on the compensation issue.
Among the finalists named last week, Y&R remains the favorite. Several sources close to the review said that the longtime personal friendship between Sears Merchandise Group chairman/ceo Arthur C. Martinez and Y&R president Peter Georgescu is a persistent factor.
However, recently appointed marketing chief, and one-time Procter & Gamble executive, John Costello, also has ties to WRG.
Hal Riney, which apparently has no personal connections to Sears, was a strong favorite going into the last round, however sources said none of the five agencies ‘blew Sears away.’
Copyright Adweek L.P. (1993)