Rubbermaid maker planning to cut customer base in half
The conglomerate that makes the Rubbermaid, Sharpie and Coleman brands plans to offload about half of its manufacturing plants and warehouses and cut its customer base in half amid disappointing sales and profits.
Newell Brands plans to significantly reduce its corporate focus by “exploring strategic options” for numerous products, including Rawlings, Rubbermaid commercial assets, Goody, refuse and garage items and playing cards.
The Hoboken, N.J.-based company said it would “begin the evaluation process immediately” and finish by the end of 2019.
When companies announce they are exploring “strategic” alternatives for assets, it often involves sales or closures.
It was not immediately clear whether the company is targeting a specific number of job cuts or cost reductions.
The company also announced a shakeup for its board of directors with the immediate resignations of three members: Ian Ashken, Domenico De Sole and Martin Franklin.
The moves come less than two years after Newell Rubbermaid completed its acquisition of goods maker Jarden, whose brands included Sunbeam, Rawlings and Coleman. The combined, renamed company had more than 45,000 employees worldwide after the deal.
Newell already sold its tools division to Stanley Black & Decker for nearly $2 billion in October 2016.
Concerned investors drove Newell’s stock down more than 20%.
The company warned that its 2017 full-year “core” sales would increase only 0.8% after previously predicting an increase of 1.5% to 2%. The company also said its earnings would fall short of projections.
Struggling retailers are taking a toll on Newell. The company said retailers are “rebalancing” their inventory, which has undermined its business.
Newell also said the bankruptcy of “a leading baby retailer” had left a mark — likely a reference to 2017’s Chapter 11 bankruptcy filing of Babies R Us owner Toys R Us.
“We believe that exiting non-strategic assets, reducing complexity and focusing on our key consumerfocused brands will make us more effective at unlocking value and responding to the fast-changing retail environment,” Newell CEO Michael Polk said in a statement.
“A stronger, simpler, faster Newell, together with leading brands, brilliant marketing, outstanding innovation and an advantaged e-commerce capability, better positions us to win in these dynamic times.”
“A stronger, simpler, faster Newell, together with leading brands, brilliant marketing, outstanding innovation and an advantaged e-commerce capability, better positions us to win in these dynamic times.” Michael Polk Newell CEO