Troubles have touched Createthe Group’s operations on both sides of the Atlantic.

This story first appeared in the March 28, 2014 issue of WWD. Subscribe Today.

The company, which was one of the first and leading digital agencies for the fashion and luxury space, laid off 20 staffers from its New York headquarters last week, around the same time it closed its London office, a source told WWD.

And high-profile clients are still trying to get a clear answer as to whether or not the company had a data breach that could have compromised customer information. Sources said the agency was “inconclusive” when brands asked for more information about a possible breach.

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That’s made clients nervous, and at least two major designers are considering decamping to other agencies.

Burberry and Kate Spade New York have not worked with the company for some time. There were rumors around the time of former chief executive officer James Gardner’s departure that Marc Jacobs was shopping around for agencies — but the firm denied this and Jacobs’ camp didn’t comment. A source said Jacobs is currently in the process of migrating platforms, but the brand’s new agency is not known.

According to a client of Morpheus Media, acquired by Createthe Group in 2011, the company sent an e-mail Tuesday notifying the brand of possible issues on the CTS e-commerce platform — but that it would in no way affect clients not operating on the proprietary platform. On Wednesday, the company sent an update to clients denying a breach of security, but noting that a forensic investigation company was brought on board to conduct a “comprehensive examination and to support the ongoing security of the CTS Platform.”

Createthe Group did not respond to requests for comment Thursday.

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