Agencies that work with stylists, celebrities and brands on campaigns and red-carpet appearances, among other facets of image-making and marketing, are having to make further cuts as clients continue to cancel work and pull out of deals. If not that, some brands are said to be insisting that the current pandemic means fees for agency work, already set for months or years before, should be lowered to rates that agencies can’t really afford to accept. For one coronavirus-related reason or another, Spring agency, Krupp Group and Karla Otto have all trimmed staff in recent weeks.
“I do think a lot of clients, not all of them but a lot, are using this as an excuse to drive down fees,” Phillip Bodenham, founder and chief executive of Spring agency in Los Angeles and London, said. “I’ve spoken to a lot of people running other agencies, and they say it, too.”
Given the general falloff of business among fashion and red-carpet clients, Bodenham is closing his Spring office in L.A., opened less than two years ago, and has laid off the roughly six staffers in it. He is also reducing his staff of 20 in London, an office opened 11 years ago, but will continue to operate there on a smaller scale. Spring clients include brands like A.F. Vandevorst, Camilla, Alice + Olivia, Hussein Chalayan and Mark Fast, among about two dozen others.
“It’s really a bit like every man for himself right now, and I’ve just no interest in playing that game,” Bodenham said of his decision.
He added that work around red-carpet events, the lifeblood of fashion agencies and p.r. in L.A., along with the stylists they work with and sometimes represent, has completely dried up. “The red carpet is dead right now.”
Bodenham is not expecting the Emmy’s to go on this year, at least not as the award ceremony has gone on for more than 70 years, noting L.A. Mayor Eric Garcetti’s recent comments that large gatherings in the city, if not the state, are unlikely to be allowed again until next year.
He expects this will have an outsized effect on agencies and that many more in the coming weeks and months will reduce staff and even close offices altogether. To his mind, the increasingly likely scenario for business is that “it’s not actually going to get better until the whole of the West is vaccinated.”
“Agencies, we’re the canary in the coal mine for the industry and we’re all going to struggle,” Bodenham said. “There will be so many more closures in L.A., London, New York, Milan, and then clients will want us again when they can come back. But what will they be coming back to? It should prompt some better behavior from brands… A lot of them are behaving badly.”
Elsewhere in the industry, Karla Otto is scaling back its large operation, with a recent reduction in its main office of New York. According to a filing to the New York Labor Department earlier this month, Karla Otto has laid off 28 staffers due to “unforeseeable business circumstances prompted by COVID-19.” The layoffs are thought to be temporary, but WARN notices are generally not required for temporary layoffs that are expected to last less than six months. Sources also said the office in L.A. has been reduced by several people and that the office there is closing altogether.
A company spokeswoman denied outright rumors of the L.A. office closure, saying the team there is currently working from home as it’s looking to move offices. She said the L.A. team had “outgrown” the now former space in West Hollywood, which is being rented out. Karla Otto operates in 11 offices and has grown into a major fashion and media broker over almost 40 years in business, with current clients including Amazon Studios, Oscar de la Renta, Cartier, L’Oreal, Maison Margiela, among dozens of high-profile others.
The spokeswoman declined to comment on specifics of any reductions in Karla Otto staff, but insisted “we continue to have a healthy headcount.”
Krupp Group, which has offices in L.A. and New York, is also said to be laying off some staff. According to its web site, past and present clients include Intermix, Maje, Mother, Rachel Comey, Sam Edelman and others.
Speaking to WWD earlier this month, founder Cindy Krupp confirmed that she had made some layoffs in New York. She did not disclose numbers, but said it was just a few. “We have had to do what I hope are temporary layoffs,” she said.
Asked separately about rumored layoffs in L.A., Krupp did not respond.
As WWD previously reported, agencies including PR Consulting, Sequel (formerly Think PR), Bradbury Lewis, Linda Gaunt Communications and BPCM, have all resorted to layoffs as the coronavirus puts most of their work on indefinite hold.
Patrick Bradbury, founder of Bradbury Lewis, reflected to WWD last month that some of the changes taking place in the industry, even before the pandemic but accelerated by it, are shaking the work of agencies to their core.
“I thought we used to be able to control our clients by simply doing the best work we could do,” Bradbury said. “One thing I realized a few months ago is that our good work isn’t enough anymore. There are other factors that are going to make these decisions for us which is such a tough spot to be in.”
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