Kovel Takes a Stake in Kresser Stein Ad Agency : Advertising: New executive says positive outlook of employees persuaded him to join the troubled firm.

Since losing Arco’s gasoline stations and other key clients this summer, the Santa Monica advertising agency of Kresser Stein Robaire has been sputtering downhill.

Two top executives quit, in what observers said was a clash of business styles. Many employees who created ads at the agency followed those executives out the door.

The agency disclosed Friday a much-anticipated reorganization that includes the signing of Lee Kovel, a well-regarded creative director from Lord, Dentsu & Partners in Los Angeles. Kovel, 42, will serve as chief creative officer and acquire an ownership stake in the agency.

When the deal is completed Nov. 1, the agency will change its name to Kovel/Kresser & Partners, its second name change in as many years. Bob Kresser, who co-founded the agency in 1976, will continue as chairman and chief executive.

Kovel’s new position is hardly a dream job. Though the agency continues to produce spots for health care provider Kaiser Permanente, it’s been hurt by the loss of Arco, Albertson’s supermarkets and other high-profile clients. The agency’s billings have dropped by a third since January, to about $80 million.

What’s more, the agency has lost much of its creative department, where copywriters penned such slogans as “the West’s favorite gasoline” for Arco.

The situation appeared so grim that when he was approached two months ago about taking the job, Kovel said his reaction was: “It looks like the place is tanking.”

But Kovel said he changed his mind about the agency’s fortunes after talking with employees and clients who hadn’t panicked. He said they had a positive outlook, despite the turmoil.

Kovel took the job after several weeks of negotiations because, he said, it gave him the opportunity to help build an agency, and run it.

“If this hadn’t come along, I probably would have opened my own shop,” he said.

Kresser Stein Robaire’s woes began last October after Kresser/Craig, a conventional agency, purchased Stein Robaire Helm, a struggling rival whose off-beat work epitomized California cool.

The deal was expected to create a powerhouse agency, one able to service big conservative companies as well as young firms looking for trendy work. Instead, the styles of the two agencies clashed, alienating some clients. In early August, creative leaders John Stein and Jean Robaire quit.

Jean Craig, a former partner in Kresser/Craig, said Kovel, who helped build Lord, Dentsu’s Los Angeles office, is a better fit with her old agency’s style.

“You have agencies that put their stamp on the work and agencies where the work flows from the client,” she said. “At Kresser/Craig, the creative product was rooted in the client.”