JWT Ad Agency ‘Not for Sale,’ Chief Says : Tells Shareholders That None of Ailing Firm Is on the Block
The for sale sign is not up--nor are there plans to post it--at the troubled J. Walter Thompson ad agency, Chairman Don Johnston said at the parent company’s annual meeting Tuesday.
“JWT Group is not for sale, none of the JWT Group companies are for sale, nor are any parts of any JWT companies for sale,” Johnston twice told about 275 shareholders.
Industry rumors have surfaced in recent weeks that the company’s public relations unit, Hill & Knowlton--and possibly J. Walter Thompson itself--was for sale.
The embattled Johnston, dressed in a gray suit, faced a remarkably passive group.
Although three of the firm’s top executives have been fired or resigned over the past four months, only one question on the leadership topic arose during the two-hour session.
In response, however, Johnston refused to explain what led to the resignation last month of Bertram Metter as chairman and chief executive of J. Walter Thompson USA. None of the shareholders asked about the firing one month earlier of Joseph W. O’Donnell, who was chief executive of J. Walter Thompson Co. and heir apparent to Johnston.
Reached at his home in Byram, Conn., Metter refused to discuss specifically why he left the company.
But Metter did say it was generally because of philosophical differences over the direction of the firm, not because of any one-time argument with Johnston.
“In the long run, J. Walter Thompson will turn itself around--primarily because its name is so strong,” Metter said.
And will Johnston step down as chairman any time soon? Metter replied: “I don’t know how that question will be resolved.”
Another yet-to-be answered question is whether the earnings picture at JWT Group can live up Johnston’s rosy projections. In the first quarter of 1987, reported last week, the company posted a loss of $1.4 million.
But that didn’t stop Johnston from telling shareholders that he expected JWT Group to post near-record net income for 1987. He said the 1987 figures would rival that of the firm’s 1985 record year, when it posted earnings of $19.4 million. In 1986, earnings fell to $5.9 million.
In light of the poor first quarter, Johnston’s outlook for record earnings is “a joke,” said Victoria Butcher, analyst at the New York securities firm, Eberstadt Fleming. “It’s just wishful thinking,” she said. “No serious investor is going to own a large amount of this stock any more.”