Two-Year Wait: Sears Commits – Puts $15-20-Mil. Apparel Biz Up for Grabs

Sears, Roebuck & Co.’s two-year flirtation with having an outside agency take a shot at part of its business, finally became official last week when the company announced it would review the $15-20 million apparel business at Ogilvy & Mather/Chicago.
While outside agencies hope the small portion may lead to bigger things, Sears insiders say that the review is an isolated event brought on by Sears senior vp/marketing Matt Howard’s two-year desire to have more than one agency source.
The review was not totally unexpected. This summer both DDB Needham Chicago and Leo Burnett Co. had been knocking on Sears’ door with major pitches for the huge retailer.
In a statement on Friday, Sears said it retained Morgan Anderson & Co. in New York to conduct the review and expects to have a new agency by May. The company wants a campaign ready for the fall.
The company said it was doing the review now based on ‘the fact that we are at a point where apparel sales are growing and this was the best time to take a look at a couple of ideas,’ said Ralph Hoch, national manager of advertising for Sears. ‘We don’t currently have a (branded) apparel campaign, so this was probably the best time to do this. O&M is a big part of this and has been working on a branded campaign and could very well be the agency we select.’
Expected to pitch the business beside O&M, which handles the entire Merchandise Group business, will likely be DDB Needham, which had handled the apparel business in the early 1980s before all the business was consolidated with O&M. Other likely candidates are Foote, Cone & Belding/Chicago, and J. Walter Thompson/Chicago, which have both worked on the business in the past.
Leo Burnett, which handles Sears’ Allstate Insurance unit and Dean Witter Financial Services, had been considered a contender until the agency won the $20 million Fruit of the Loom business last fall. Burnett now has conflicts with Sears in just about every category.
O&M officials were not shocked by the review, and said they are confident about their chances of retaining the business.
‘I see it as a great opportunity for us,’ said O&M/Chicago president and executive creative director Tom Hall. ‘They are at a point where it makes sense to do a strong apparel campaign, and we know that business very well. I think we have a great shot at it.’
Hall said that despite the apparel review, the relationship with Sears, ‘has never been better.’
O&M had been pushing Sears to do a comprehensive apparel campaign for the past two years. But until now, clothes selection, and differing opinions inside Sears as to how to execute a program have been the biggest stumbling blocks. Spending on apparel has actually declined since 1990. O&M was able to push through the company’s successful Kidvantage program for frequent buyers of kids clothes which has just been expanded to kids shoes as well.
Still, as Howard is initiating the review, sources inside Sears say that the senior vp/marketing may end up with a differnt job in a restructuring that is expected to come down from new Merchandise Group chairman Arthur Martinez at any time.
‘He may be out of the picture at some point, so no one knows what’s going to happen,’ said one Sears insider.
Meanwhile, insiders also indicate that not all Sears officials are happy about the decision to review the apparel division. One source said at least one high-level apparel executive was concerned that the time needed to bring a new agency up to speed would actually be a step back for the retailer.
But Howard, who headed up the appliance division before becoming marketing head and has believed ever since that working with two vendors instead of just one was a rule of thumb, is committed to making his mark at the retailer.
Sears’ Hoch said that the decision had been made with the full input of the apparel department as well himself and Matt Howard.
O&M has been trying to keep its lock on the business, but has stepped up its previously non-existant new business activity in the event that some Sears business would move.
Copyright Adweek L.P. (1993)