The speed of D'Arcy's closure took its regional executives by surprise, but the writing was on the wall well before Publicis announced its planned acquisition of the network's parent company Bcom3 in March.
Publicis Worldwide regional chairman, Guillaume Levy-Lambert, said D'Arcy was singled out because "after an analysis of each agency brand, it became clear than D'Arcy was less strong than the others".
He added: "No one has successfully managed four multinational networks, but we are well positioned to manage three."
The three main networks chosen to move the world's fourth-largest communications group forward are Publicis, Saatchi and Saatchi and Leo Burnett. Publicis' has another agency brand Fallon, which has only just launched in Asia.
D'Arcy Southeast Asia managing director, Dick van Motman, noted: 'It is regrettable what has happened in light of the momentum we have in some Asian markets."
Just last month, D'Arcy picked up two President Foods noodle brands in China and General Motor's Vectra brief in India. But the loss of the prized Mars' business - globally realigned with BBDO and TBWA a few months ago - and the Pampers assignment left the network in a vulnerable position amid the global advertising recession. It is estimated that the two accounts had billed US$175 million annually.
"D'Arcy's Hong Kong office basically imploded in the last few months," noted a rival agency source. He cited the relocation of Procter & Gamble's business to the Guangzhou office as a key reason. Key Hong Kong-based executives such as Greater China CEO Ken Wright and executive creative director Marc Lucas quit when the move was made.
Agency sources believe D'Arcy's closure signals the start of a bigger industry consolidation, driven by client cost pressures.
Against a still slumping advertising market and dealt a new blow with the deadly explosion in Bali, Publicis' decision to fold D'Arcy is expected to generate an immediate cost savings.
D'Arcy has offices in all Asia's key markets and employs around 500 people across the region.
There will certainly be redundancies but no one knows how many yet.
Money isn't the only objective as Publicis wants to expand its agencies - Burnett and Saatchi to the size of Ogilvy & Mather and McCann-Erickson.
To that end, it has appointed senior global executive of D'Arcy to top positions within Publicis - Susan Gianinno, D'Arcy's president and chief branding officer, has been named to head Publicis in the US as chairman and CEO; Lee Garfinkel, D'Arcy's president and chief creative officer, will become the worldwide creative director for Publicis, a position which did not previously exist.