NEW YORK: Hoping to add customers and sell more products with a uniform marketing strategy, Citigroup Inc. said on Tuesday it would rebrand itself as “Citi,” and sell its trademark red umbrella to St. Paul Travelers Cos.
The largest U.S. bank said it would do business as “Citi” and retain a red arc in its logo. Its legal name will remain Citigroup Inc.
“Citigroup has had a schizophrenic image,” said Robert Passikoff of Brand Keys Inc., a New York bank branding specialist. “It needs to bolster technology and customer service, and adopting a new brand gives it a foundation from which it can launch these values in a believable way. But many rivals have already spent the time and money co-opting those values. For Citigroup, it may be too little, too late.”
Citi is “how the vast majority of clients think of us,” Chief Executive Charles Prince said in an internal memo. “Our research consistently showed that the umbrella was still associated with insurance, specifically St. Paul Travelers. It no longer reflected the company we are or the company we want to be.”
Citigroup spokesman Mike Hanretta confirmed the memo’s contents.
Beginning in the second quarter of 2007, Citigroup’s investment bank, private bank, research and alternative investment units will carry the Citi name, and the brokerage will be called Citi Smith Barney. The Citibank unit will retain its name, as will Banamex in Mexico, Citigroup said.
The changes mark Prince’s latest step away from the banking model of Sanford “Sandy” Weill, his predecessor and mentor, who came up with the Citigroup name.
Weill tried to turn Citigroup into a one-stop financial “supermarket.” Prince has ditched lagging units to focus on adding branches and growing internationally. It operates in more than 100 countries and employs more than 300,000 people.
Citigroup, based in New York, spun off Travelers Property Casualty Corp. in 2002, and that company merged with St. Paul Cos. in 2004 to form St. Paul Travelers.
The sale of the umbrella for an undisclosed price requires antitrust approval and is scheduled to close in March.
St. Paul will change its name to Travelers Cos. and its ticker symbol to “TRV.” The St. Paul, Minnesota-based property and casualty insurer said it would not record a charge for the transaction. Travelers first used the umbrella in 1870.
A COMPANY BY ANY OTHER NAME
Other companies with name changes this year include Apple Inc., formerly Apple Computer, and disability insurer UnumProvident Corp., which is becoming Unum Group.
In recent years, Dell Inc. and FedEx Corp. have also shortened their names.
Prince, under pressure from investors to cut costs and boost Citigroup’s stock price, has said a uniform name might lower advertising spending.
“There is a significant cost detriment right now in having multiple advertising programs for multiple businesses that don’t reinforce each other,” Prince said on a Jan. 19 conference call.
Weill thought the Citigroup name and umbrella achieved “balance” between Citicorp and Travelers Group when they merged in 1998.
“That red umbrella represented all that I aspired to for more than 20 years: building a diversified powerhouse with an ‘umbrella´ of services that would cover all of our customers’ needs,” Weill wrote in his autobiography, “The Real Deal.”
Yet many Citigroup units never adopted the name, or took only the “Citi” root. The stadium being constructed for the New York Mets baseball team will be named Citi Field.
Citigroup’s largest U.S. commercial bank competitors do not have name problems.
Bank of America is the straightforward successor name to NationsBank. JPMorgan Chase combines the names of financier J. Pierpont Morgan with Salmon Chase, a treasury secretary under Abraham Lincoln. Wachovia is a Latin form of Wachau, a German name used by 18th-century settlers to name some North Carolina land. And Wells Fargo is named for its 19th-century founders, and carried enough resonance for Meredith Willson to write a song about it for “The Music Man.”