WPP courts Wal-Mart after Interpublic is axed

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The Independent Online

Wal-Mart's plans to overhaul its down-at-heel image have been thrown into chaos after the group fired its senior marketing manager and the advertising agency she hired amid allegations she took gifts from potential suppliers and had an inappropriate relationship with an underling.

Julie Roehm left the company suddenly earlier this week, after 10 controversial months at the world's largest retailer, and revelations about the reasons for her departure are gripping the advertising industry. Sean Womack, a lower-ranking colleague in the marketing department, was fired on the same day.

Now Wal-Mart has also torn up its $580m (£297m) contract with the ad agency Draft FCB, a division of Interpublic, which was appointed by Ms Roehm little more than a month ago.

The sacking of Draft FCB means one of the retail world's most lucrative advertising accounts is back up for grabs. Britain's WPP, which had made the original shortlist, will be among those rebidding. A second Interpublic division could also be in the running.

The group believes Ms Roehm broke its ethics policies by attending a lavish dinner organised by Draft FCB at New York's über-trendy sushi restaurant Nobu, while still deciding who should win the advertising account.

Wal-Mart bans employees from taking gifts from potential suppliers or contractors, and specifically outlaws "supplier-paid trips, liquor and meals and personal services or favours". Its ethics policy also states they "may not date or become romantically involved with another associate if you can influence that associate's terms and conditions of employment".

In interviews with the New York Times, Ms Roehm and Mr Womack denied their relationship violated company policies or that they had done anything wrong in dealing with the ad agencies. Mr Womack said he never had "an improper relationship" with Ms Roehm. "We are friends."

Ms Roehm said: "I think part of my persona is that I am an envelope pusher. The idea of change in general can be uncomfortable for many people, and my persona as an agent of change can prompt that feeling."

The 35-year-old had been tipped as one of the advertising industry's future stars, after winning plaudits for her racy campaigns at Chrysler, the car maker.

She continued to raise eyebrows - and hackles - at the famously frugal Wal-Mart, which put its $1bn-a-year advertising budget out to tender for the first time in decades. In a flamboyant and highly unusual move, executives from the short-listed agencies were all invited to an exclusive concert by the Eagles in Manhattan in October before the winners were unexpectedly revealed.

Wal-Mart's sales growth has stagnated in its US market, and the company is trying to encourage its core low-income shoppers to spend on bigger-ticket items, and at the same time to attract wealthier customers. The company said yesterday the sacking of Draft FCB would not greatly delay a new marketing push in the spring, because a good deal of planning had been done during the tender process.