Chiat/Day Loses Reebok’s $40-Million Ad Business

In a clear case of the shoe never fitting, Reebok, one of the nation’s largest athletic shoe makers, and Chiat/Day/Mojo, perhaps one of the nation’s most creative but quixotic ad agencies, agreed on Wednesday to part ways. The estimated $40-million advertising account is now up for grabs.

The news came on the day that Reebok, which is based in Stoughton, Mass., reported record net income for the 1989 fiscal year, up 28% from 1988, and record sales, up 2% from the previous year.

“Chiat/Day/Mojo’s work on the Reebok account over the past three years has been critical to helping us achieve and maintain our leadership position in the category,” said Frank J. O’Connell, president of Reebok International Ltd., U.S. division. “However, with our restructure into performance and life-style units, it is an opportune time to conduct a review of the business,” he said in a statement.

The account was handled out of the agency’s New York office. Chiat/Day/Mojo’s Venice office primarily creates ads for Nissan.

Although the loss of the Reebok business has been rumored for many months, it is still a major blow for the firm. Chiat/Day/Mojo, which recently underwent a number of top level management changes, was trying hard to shake the nagging image of an agency that cannot hang on to some of its most high-profile clients for more than a handful of years. The agency formerly created a number of award-winning ads for Nike, but lost that account, too.

“This is very frustrating,” said Bob Wolf, recently named chairman of Chiat/Day/Mojo. “It has been a very difficult account. They had four changes of management in the three years we’ve been there.”

That, of course, meant constant changes in advertising strategy. The two major Reebok campaigns developed by Chiat/Day/Mojo were “UBU,” which featured ads that placed weird people in equally odd settings, and “Physics of the Physiques,” which featured hip people pumping iron. But its most recent ads for Reebok’s inflatable basketball shoe, “The Pump,” appears to be the most popular. The campaign features quick cuts of athletes--and even Laker Coach Pat Riley--jabbering about the new shoe.

Wolf said Chiat/Day/Mojo will continue to handle some Reebok advertising in Europe. And he said layoffs are expected to be minimal.

Although Reebok posted record earnings Wednesday, it continues to lose market share to Nike.