Hills signs with new ad agency - Hills Department Stores Inc., discount store chain

Discount Store News, Sept 3, 1990

Hills Signs With New Ad Agency

Eyes Creative, Fresh Look For TV Ad Campaign

CANTON, Mass.--Hills has hired a new advertising agency to create a fresh, new look for its broadcast advertising. The 212-store discounter signed on with the Cliff Freeman and Partners advertising agency last month.

Freeman's clients include Little Caesars restaurants and Philips Lighting. Freeman is credited with creating the "Where's the Beef?" campaign for Wendy's fast-food restaurant chain.

The move, worth $17 million in annual billings, means that Hills will not be using its in-house ad agency, Canton Advertising, for almost half of its advertising programs this year.

Until now Canton Advertising had been Hill's exclusive ad agency.

"We were looking for a fresh look from the creative standpoint," said Wes McDonough, senior vice president of marketing and advertising for Hills. "It's time. We've been doing this [the company's advertising with Canton] for years."

The first ad spots should appear around Christmas, said McDonough.

"We're confident that Cliff and his people will create the kind of advertising Hills needs to stand out in an increasingly competitive market place," said McDonough.

Cliff Freeman and Partners was chosen for its creativity, said McDonough. It and all the other agencies reviewed, including Canton Advertising, did not have to provide "spec" commercials for Hills.

The $17 million in billings is about the same broadcast budget Hills had last year, said McDonough. He declined to say how much money Hills spends on advertising.

In other news, Hills reported sales for the second quarter ended Aug. 4, rose 10.4 percent to $475.6 million. Same store sales for the quarter rose 4.6 percent. Operating income dropped to a little over $1 million, from $7.9 million a year ago. Net loss rose to almost $15.2 million, from $10.2 million in the year ago period.

For the first half of 1990, Hills sales totaled $910.8 million, up 9.9 percent from the same period last year. Same store sales for the two quarters rose 6.6 percent. The firm reported an operating loss of $4.8 million for the half, compared with an operating profit of $2.4 million a year ago. Net loss grew to $32.1 million for the period ended Aug. 4, up from $26.6 million in 1989.

"Earnings in the second quarter continued to be affected by higher expense levels associated with last year's increased rate of new store openings. We expect that these new stores will favorably impact operating results in the important second half of the year," said Stephen Goldberger, chairman and ceo.

"We have been encouraged by recent sales trends and our inventory continues to be well managed. We expect our new advertising programs and chainwide fashion refixturing to provide favorable operating results and assist us in meeting our goals going forward."