Feb. 13 (Bloomberg) -- Citigroup Inc. decided it's better off without Sanford Weill's umbrella.

The biggest U.S. bank plans to sell its red umbrella trademark to St. Paul Travelers Cos. and operate under the ``Citi'' name after failing to get most consumers to think of anything except insurance when they saw the 137-year-old symbol. The deal, announced in separate statements, reunites the Travelers name with a logo that consumers still associate with the insurer and the slogan, ``You're better off under the umbrella.''

The umbrella was a favorite of Weill, the one-time head of Travelers who engineered a 1998 merger with Citicorp and then put the image on a wide array of financial products to build consumer awareness. It didn't work, according to customer research cited by both companies.

``It really is quite remarkable how many times people would come back and either say it's Travelers or the Travelers Insurance umbrella,'' said Jay Fishman, chairman and chief executive officer of St. Paul Travelers, in a conference call.

St. Paul Travelers plans to change its name to The Travelers Cos. after the transaction is completed in March. Terms weren't announced. Proceeds from the sale will be used to pay for re- branding, New York-based Citigroup said in its statement.

Citigroup spun off Travelers Property Casualty Corp. in 2002 while keeping the logo. In 2004, Travelers Property Casualty merged with St. Paul Cos. in a $17.9 billion deal engineered by Fishman. He held the top post at Travelers while it was part of Citigroup, leaving in October 2001 to run St. Paul.

Weill did not immediately return calls to his office for a comment.

Rebranding Costs

Charles Prince, the current CEO of Citigroup, announced plans to cut more than $1 billion in costs this year after shareholders complained expenses were growing too fast and profits too slowly. The company didn't say today how much the re- branding will cost.

``As an investor, I would rather see results on the bottom line than see them doing things more on a cosmetic level,'' said Amit Kumar, an analyst with Minneapolis-based FAF Advisors, which oversees more than $100 billion and owns Citigroup shares. ``The brand is pretty strong; all they're doing is tweaking it a bit.''

Weill fought to keep the umbrella when he spun off Travelers from the bank, spending millions on advertising, stationery and signs, according to Monica Langley's book ``Tearing Down the Walls.''

Fate of Sculpture

``I would say good riddance,'' said Jack Trout, president of Old Greenwich, Connecticut-based Trout and Partners Ltd., a marketing strategy firm. ``It belongs with the insurance company; it certainly doesn't belong with Citi.''

The bank's new logo will be silver with a red arch over the last three letters. Divisions including the corporate and investment bank, the wealth management group and alternative investments will begin using the new brand in the second quarter. The consumer bank will keep its blue logo.

``For the first time since the creation of Citigroup, we will present a unified brand to our clients around the world,'' wrote Prince in an internal memo to employees. ``Our research continued to show that the trademark red umbrella was more connected with insurance, specifically St. Paul Travelers.''

No decision has been made on the fate of the large red umbrella outside Citi's Tribeca offices on New York's Greenwich Street, said Michael Hanretta, a bank spokesman. Fishman said he hoped to buy the sculpture in a separate transaction.

Dates From 1870

St. Paul Travelers, based in St. Paul, Minnesota, said the umbrella may have made its first appearance in 1870 in an advertisement as an illustration of insurance protection. It didn't become the official trademark of Travelers until 1959. The company said it will change its New York Stock Exchange ticker symbol to TRV.

The Citigroup branding committee was headed by Ajay Banga, the head of consumer business outside the U.S., and Lisa Caputo, a former press officer in the Clinton administration, now marketing chief in the bank's consumer group.

In November, Citigroup agreed to put its name on the New York Mets' new stadium as part of a 20-year marketing partnership struck with the baseball team to raise the company's profile. ``Citi Field'' will open for the 2009 season and the company will pay about $20 million a year for the naming rights, people familiar with the accord said at the time.

Citigroup shares rose 28 cents to $53.71 at 4:00 p.m. in New York Stock Exchange composite trading. The bank's shares have declined 3.6 percent this year. St. Paul added 10 cents to $52.72.

To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: February 13, 2007 18:44 EST