Homebase to review £27m account as slowdown hits
LONDON - Homebase is to review its £27m advertising account, currently held by Abbott Mead Vickers BBDO, as it battles with a consumer slowdown on the high street.
The review is being handled by a new marketing procurement company called RD Squared.
It is understood the firm has already begun contacting agencies for what is expected to be a procurement led pitch. Media planning and buying duties, handled by MindShare, are unaffected by the advertising review.
AMV BBDO is expected to repitch for the business, which it has handled for ten years. Previous campaigns have featured Leslie Ash and Neil Morrissey, but they have since been axed.
According to Nielsen Media Research, Homebase spent £21.8m on TV advertising, almost £2m on radio and £3.1m on press ads in 2007.
Homebase is a division of Home Retail Group, which, together with Argos, was demerged from Great Universal Stores in 2006 at the same time as Experian.
Terry Duddy, Home Retail Group's chief executive, last month warned about a tough outlook for consumer confidence.
Duddy said: "The anticipated consumer slowdown is now more evident and it is obvious that sales growth in the short term will be harder to come by."
However, Homebase, which competes against rival B&Q, experienced a better-than-expected Christmas, with sales down 6.3% in the 18 weeks to January 5, gross margins up 2%, while sales of "big ticket" items, such as kitchens, actually grew.
The move comes almost six months after Homebase briefed the AAR to carry out a benchmarking exercise on its behalf.
At the time, a Homebase spokeswoman said: "We have approached the AAR as part of a cost-comparison exercise to ensure AMV continues to deliver us great value for money."
Last year, Homebase appointed direct marketing agency Craik Jones Watson Mitchell Voelkel to handle a £3m brief to promote its Spend & Save loyalty scheme.
Homebase was unavailable for comment at the time of writing.
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