WPP is closing its struggling advertising agency United London and moving key staff into sister agency Grey - but managing partner Jim Kelly will leave the company, MediaGuardian.co.uk can reveal.
Mr Kelly, who was parachuted in by WPP boss Sir Martin Sorrell along with Robert Campbell in January last year to revive the once-famous agency, will leave to pursue other opportunities.
The majority of the agency's 25 staff will be made redundant, although key senior management figures have been offered roles at Grey.
United London's deputy managing director Rhona Cairns, planning director Richard Huntington, client services director Jason Cobbold and head of design Nils Leonard are understood to be in discussions about taking roles at Grey.
Grey London is announcing today that the head of planning, John Lowery, is leaving the agency but may work as a consultant for the network in Europe.
The death blow for United London - which when known as HHCL famously created the "slag of all snacks" tagline for Pot Noodle and the original "You've been Tango'd" ads - was last November's loss of the £75m BSkyB business.
United London's remaining clients - which include News International's the London Paper, the Food Standards Agency and the Home Office and Department of Health's alcohol harm reduction ad account - are being moved to Grey.
"This only relates to United London; it does not affect the rest of the network," said Laurence Mellman, the chief operating officer of the global United Network.
"United London has struggled for a number of years. The loss of Sky last autumn was a body blow, the agency didn't have the critical mass to survive. The view is the best way to provide stability is to move clients to Grey. A number of staff have been made redundant. There won't be any United branding within the setup at Grey."
Jim Kelly, who alongside Campbell was a co-founder of WPP-owned Rainey Kelly Campbell Roalfe/Y&R - famed for work such as "Your M&S" and Virgin Mobile, was tipped to take the vacant chief executive role at Grey.
The incumbent, Tamara Ingram, was moved in January to head up WPP's $1bn-plus global Procter & Gamble unit while also taking the role of Grey UK group chairman.
The closure of United's London office is a blow for Sir Martin Sorrell's original ambition to develop a creative "hot shop" micro network akin to the likes of Wieden & Kennedy and Bartle Bogle Hegarty that would be an alternative to WPP giants such as Ogilvy & Mather and JWT.
The United Network has undergone various name changes and overhauls - from 2001 until last year it was called Red Cell.
At the end of 2005 Sir Martin put into play a series of moves to try, once again, to revitalise the ailing London office and under-performing network.
To drive its revitalisation, a deal was struck with Lord Bell's Chime Communications to buy its remaining 51% stake in the London operation. WPP had originally taken a 49% stake in 2003 for £3.5m.
United has also seen its share of management instability. Last year European president Amanda Walsh and Steve Henry, one of adland's most respected creatives and the "H" from HHCL, both left.
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