Carl’s Jr. in Market for New Advertising Firm

Don’t look for Carl N. Karcher’s familiar face to disappear from TV, but a different agency will soon be creating the Carl’s Jr. spots that helped make him a household name.

With fast-food sales continuing to slow, the Anaheim-based fast-food chain Wednesday put its $20-million annual advertising business up for bids. Losing the business is the Los Angeles office of Della Femina McNamee.

Company officials refused to fully explain the reason for the change. Carl’s is “planning to move in a new strategic direction,” John Farrar, vice president of marketing who joined Carl Karcher Enterprises just four months ago from the Jack in the Box chain, said in a statement.

Della Femina, the chain’s agency for six years, was one of the few major Los Angeles firms that until now had been hiring people instead of firing them. In fact, it has won $60 million in new business during the past year--most recently picking up the Dodgers ad account.

But Karcher was the agency’s No. 2 client, and substantial layoffs are expected later this week. “Nobody likes to lose a big account,” said Peter Stranger, president of Della Femina’s Los Angeles office. “Layoffs are absolutely being considered.”

Although Stranger declined to state how many employees might be handed pink slips, industry executives say up to 20 employees may go. At the same time, the agency Keye/Donna/Pearlstein has recently told about 20 of its 34 employees that they will not have jobs much longer. That agency is expected soon to announce a merger with the Seattle-based ad firm Livingston & Co.

Hundreds of Los Angeles ad executives are already without jobs. With the expected layoffs at Della Femina and Keye/Donna, up to 40 additional industry professionals may soon be pounding the pavement.

But the industry is simply mirroring the downward-spiraling business and belt-tightening among many clients. The fast-food industry in particular is suffering tough times as consumers--eating out less often--are being beckoned with price-cutting promotions.

“The fast-food industry has been hit really hard,” said Sarah Stack, associate director of research with the Los Angeles investment firm Bateman Eichler, Hill Richards. “Most have not been able to pass along price increases to consumers.” In fact, most are cutting prices.

But Carl’s, with 580 restaurants, has not been able to slash prices as much as its much larger rivals McDonald’s and Burger King.