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On the Heels of Losing Its Lucky Stores Account, Cochrane Chase Is Facing Loss of Epson America

February 17, 1987|MARY ANN GALANTE | Times Staff Writer

Only one week after Cochrane Chase Livingston & Co. announced the loss of a $12-million ad account with Lucky Stores Inc., the Newport Beach agency is facing the loss of another major client--computer maker Epson America.

An Epson spokesman said Friday that Epson America is canceling its contract with Cochrane Chase. Scot Edwards, Epson's director of advertising and marketing, praised Cochrane Chase but said that after March 31, Irvine-based Fairfax Inc. Advertising will handle the computer company's annual ad account of at least $5 million. "It's more productive (and) . . . a good business move for us," Edwards said.

For the past two years, Cochrane Chase and Fairfax have jointly worked as a partnership on the Epson account, which has long been reported to be one of the largest at Cochrane Chase.

On Friday, however, Cochrane Chase, chairman of the firm, said that his company will not be affected by the loss of the Epson's business. "We'll be able to replace that business," predicted Chase, who founded the firm 21 years ago. "We're in the process of making three new presentations next week alone."

On Feb. 6, Cochrane Chase took the highly unusual step of sending out a news release to announce that the ailing Southern Food Division of Lucky Stores, Inc. was moving its business elsewhere. According to the announcement, the cancellation was part of Lucky's corporate restructuring.

Lucky executives told The Times that it was pulling its account with Cochrane Chase as part of a cost-cutting move to consolidate its advertising "under a single umbrella." Ironically, the move came on the eve of Cochrane Chase unveiling a brand new "Great Meals for Less" campaign for the supermarket chain.

The beleaguered agency attracted industry attention in July, 1985, when it lost a $12-million contract with Carl Karcher Enterprises. But Cochrane Chase was able to replace some of the business with new contracts, including Lucky.

Cochrane Chase snared the Epson account when it teamed forces with Fairfax and jointly made a pitch for the computer maker's ad business. Both companies are subsidiaries of London-based Saatchi & Saatchi Compton Worldwide. They split the account, with Cochrane Chase working mostly on a national brochure. Fairfax handled national sales promotion and branch advertising, said Ron Collins, a Fairfax vice president.

"We made the arrangement because Fairfax had offices on the East Coast and in the Midwest, and Cochrane Chase did the West Coast work," Epson's Edwards said. Since then, Fairfax has opened its Irvine office, Edwards said, "and we don't want to deal with two agencies."

Chase stressed that his company had record capitalized billings of more than $66 million for the fiscal year ended Sept. 30. Capitalized billings are derived from a complex formula to show the value to an agency of an advertiser's ads, plus the value of collateral agency services such as labor, printing and photography. According to Chase, Cochrane Chase's billings make it the largest ad agency in Orange County.

Cochrane Chase has 135 employees, seven of whom worked full time on the Lucky account. Chase declined to reveal how many worked on Epson's advertising.

Perhaps to bolster its assertions of success, Cochrane Chase last week sent out press releases announcing that it had been chosen for a $1-million ad contract by Mark Industries, a Los Alamitos-based manufacturer.

While Chase downplayed the importance of the Epson account, several sources disagreed. "It's one of the biggest in the agency," said one industry insider. "It'll hurt. . . . And the bigger the account, the longer it takes to replace."

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