When Peter Arnell met Kmart Chief Executive James Adamson by chance last March, the irrepressible brand man couldn't keep from making an impromptu pitch for his marketing advisory firm in Manhattan. But he wasn't trying to win an advertising account. Kmart should overhaul its dowdy 1,800 stores, he insisted, blurting out ideas for improvements as if he'd been thinking of them for some time. Stores should be fresher, cleaner, brighter, Arnell breathlessly enthused, waving his arms and dropping to his knees. Adamson was amused and sold. Didn't matter that the troubled retailer was reorganizing under Chapter 11 bankruptcy. I met my home run, he says. I knew we had to negotiate a contract.
Nice score for Kmart. Sales jumped more than 10% in October in the first of five Kmart stores, in Illinois and Michigan, that are being redone to specifications by Arnell Group. They feature playful directional aisle icons; shopping carts modeled after race cars; boulevardwide aisles; and a lime-green logo that is supposed to symbolize growth, which Kmart desperately needs. Business is booming for Arnell. The Madison Avenue fixture has been a fringe player for 22 years. But now he is suddenly attracting a slew of main-stream marketers. In the past 18 months Arnell has picked up eight big clients, doubling his company's revenue this year to $50 million. Pretty impressive in a marketing drought that has devastated other ad shops.
Arnell's newfound popularity reflects marketers determination to find ways other than traditional advertising to connect with consumers. Marketers are asking Arnell Group to provide a range of brand building services, from product design to songwriting. At the moment Arnell is creating a new candy for Masterfoods USA, a division of Mars. For Gateway he is conjuring a personality and look for a newline of computers. And he's helping Bank of America figure out how to extend its brand to ATM slips and teller windows. He tries to come up with new ways to connect with consumers, says Sergio Zyman, consultant and author of "The End of Advertising as We Know It."
The new business is also a result of the June 2001 acquisition of his company by Omnicom Group for an undisclosed sum. The deal gave Arnell the legitimacy and the access to big companies that he has craved.
Arnell started pitching brand work beyond advertising more than a decade ago, when he made the unusual move of hiring architects and product designers to work alongside the copywriters in his little ad agency. Then-client designer Donna Karan asked Arnell to design her boutiques in 1987, but most other marketers only tapped Arnell for the oldest form of advertising: black-and-white print ads.
Even with the new product and retail design assignments he has picked up in the past 18 months, reducing advertising to just 20% of his current work, Arnell remains best known for his stylish print ads. Those for Rockport, for instance, feature photographs of bare feet, but no shoes. In his work for Samsung, buff models embrace microwave ovens and TV sets. Arnell was behind the memorable DKNY ad in the early 1990s that featured a shot of the Manhattan skyline inside the letters of the logo. The Samsung and DKNY work are well known to Manhattanites because Arnell put gigantic versions on the sides of buildings. (His ads for RBK, Reebok's urban brand, will soon be wrapped around water towers atop buildings in Manhattan, an advertising first.) Arnell shoots the pictures for many of his agency's campaigns and signs the ads. When there are commercials, he often directs them. These are unusual practices, especially for a guy who wants to be known for more than advertising.
While Arnell maintained years-long alliances with several clients, including Donna Karan and Samsung, other relationships were more fleeting. Progressive Insurance and Esprit didn't keep their ad accounts with Arnell Group for very long. A deal with Interpublic Group unit DraftWorldwide, which briefly owned 55% of Arnell Group, fizzled after 14 months. One reason, say those in the know, was the client churn at Arnell's shop. You either love Peter or you hate him, says Mitchell Kanner, who heads IdeaBridge, an entertainment marketing outfit in Santa Monica.
Arnell prefers to say that he's sometimes misunderstood. But enamored marketers suggest Arnell's pushiness is often put to good use. When execs at the Chrysler unit of Daimler Chrysler decided last year that they wanted tunes from rock band Aerosmith in their Dodge Ram commercials, they were told by one ad agency that the band wouldn't sell rights to its music. Hearing that, Arnell picked up the phone, punched one of the buttons on his speed dial and reached Thomas Mottola, the head of Sony Music. From him Arnell learned that Aerosmith needed a title sponsor for an upcoming concert tour. In short order Aerosmith had a sponsor, and Chrysler, its music.
In the old days people always accused us of being jacks of all trades, masters of none, says Arnell. What everyone missed is that's how we became masters of all trades.