Chiat to Sell Bay Area Office to Management

Advertising agency Chiat/Day/Mojo said Monday that it had agreed to sell most of its San Francisco operation to its management, which eventually plans to buy the entire branch.

Some advertising executives say the Venice-based agency has been disappointed by the performance of its San Francisco branch, which handles about $100 million worth of advertising for such companies as Quantas, Esprit de Corp. and Atari Corp. The 110-person office is headed by Fred Goldberg, who will lead the management buyout group.

“They have a lot of strong creative talent, but the business has not been flocking to that office,” said Ken Mandelbaum, president of the San Francisco ad agency Mandelbaum Mooney Ashley. “It’s a very tough town to have an agency these days. There is not a lot of business floating around.”

Chiat/Day/Mojo said it will retain an interest in the branch office for the time being and hopes to transfer accounts for Quantas, Australian Tourist Commission and Koala Springs to its headquarters in Venice. The three accounts had belonged to Mojo-MDA, before it merged with Chiat/Day last year.

“The management group wanted the opportunity to own their own business and sought the chance to acquire the agency,” said Chiat/Day/Mojo Chairman Bob Wolf in a statement.

Neither Wolf nor Goldberg was available for further comment.

Chiat/Day/Mojo officials were not sure when the San Francisco management group would buy the remaining interest in the office. Executives said Chiat/Day had hoped that the merger with Mojo-MDA, Australia’s largest ad agency, would bring new business to the San Francisco office.

“Chiat/Day saw it as a way to get their San Francisco office back on track,” said one San Francisco advertising executive. “It didn’t happen.”