JWT's Lennox Joins Zales; Walks Into Ambush

(MoneyWatch)  Richard Lennox, JWT's account chief on De Beers' "A Diamond is Forever" campaign, left the agency to become CMO at Zale Corp., the troubled discount gem retailer.

On its face, the move seems a good one for Zales -- the De Beers campaign is the best-known diamond advertising in the business. Zale's could use some of that expertise.

But the appointment has been greeted by jeers from Nicholas White, president of White & Co., a custom jewelry retailer, who believes that Lennox -- or at least his boss, CEO Neil Goldberg -- is the wrong man at the wrong time.

Context: Zales had a flat holiday season (crucial for the diamond biz) and its latest quarter saw a 20.5 percent decline in revenues to $379 million. Last year, the company made a profit of just $10.8 million on flat revenues of $2.1 billion. So this is a discount retailer with few places left to cut.

Zales' problem, White argues, is that the retailer doesn't need good advertising: everybody already knows Zales, and the one thing they know is that you won't get very good diamonds there. In fact, the chain was sued last year by a disgruntled former vendor that alleged the quality claims in its ads were false and misleading.

Thus, White says, if Lennox ramps up a big campaign for Zales, he'll only end up reminding consumers of the chain's shortcomings. Better for the marketing department to sit on its $96 million budget while the company bites the bullet and offers quality stones, he says.

White argues -- oddly -- that Lennox was both crucial and irrelevant to the success of De Beers at JWT:

Sources say it is not clear whether Lennox will be replaced, raising questions about future of the JWT-DeBeers relationship.

Just what involvement Lennox had in developing DeBeers' advertising campaign's beyond that of maintaining the JWT-client relationship and coordinating the disparate efforts of the various departments within the agency is not clear. Anyone familiar with DeBeers marketing process knows it is highly collaborative and independent of any one group or anyone individual.

Welcome to the client side, Mr. Lennox!

Next up: Does Lennox keep The Richards Group or search for a new shop?

Image: Spec ad for Zales by Scott DelBango.