In a stunner that is sure to have major ramifications for Downtown Partners/Chicago, sources say Walgreens is launching an ad agency review. That could mean big problems for Downtown Partners/Chicago, which has been the drugstore behemoth’s agency of record since the shop was founded by creative partners Jim Schmidt and Joe Stuart in 2004. But Downtown Partners is expected to participate in the review.
For years the Walgreens account has followed Schmidt and Stuart, who moved to open Downtown Partners, an Omnicom Group shop, after they exited Euro RSCG/Chicago, near collapse at the time of their departure. In one way or another Schmidt and Stuart have been attached to the Walgreens business for at least the past 15 years.
Walgreens has been the flagship piece of business at Downtown Partners since the agency’s inception, and a loss of the business would be a huge blow to the shop, which just days ago had cause for great celebration.
Downtown Partners prevailed over 13 other Chicago shops to win the Illinois Lottery ad account, which most recently had been at Energy BBDO/Chicago. DP’s first campaign for the Lottery is expected to break in the next several weeks. The Lottery business will at least help plug part of the hole that would exist if Walgreens should wind up exiting DP.
Walgreens has financial, management problems
No one in the local ad industry could reasonably dispute the creative talents of Schmidt and Stuart, but they apparently were dealing with a Walgreens company in increasingly difficult straits. “They’re running scared,” said one source.
Among other things, Walgreens is facing stiff challenges from arch rival CVS, which has been on an expansion binge in recent years. Walgreens tried to match that, in part, by acquiring the Duane Reade drugstore chain in New York. Walgreens also has tried to lure more customers by varying its offerings far behind the typical drugstore stuff, including sushi in a store recently opened in Chicago’s loop.
Walgreens management, conservative by nature, also has been locked in a battle over prescription issues with St. Louis-based pharmacy benefits manager Express Scripts. And the drug chain has reportedly lost millions of pharmacy customers in recent months as a result of that fight.
Furthermore, internal management struggles at Walgreens apparently resulted in the recent exit of the company’s chief marketing officer Kim Feil, with whom Schmidt and Stuart worked closely in recent years. Feil came to Walgreens in the fall of 2008 from Sara Lee, where she had been chief marketing officer for Sara Lee North America.
Walgreens’s move to conduct an agency review comes just a couple of months after Downtown Partners delivered one of its most popular TV commercials yet for the drugstore company — a flu-shot spot featuring identical twins Edith and Ellen.
After the spot began airing nationally, the entertaining septuagenarians recently appeared on the “The Rosie Show” on the Oprah Winfrey Network to talk about their lives as identical twins.
Contact Lewis Lazare at LewisL3@aol.com.