By Charlie Lunan
Newell Brands Inc. (NYSE:NWL) reported organic sales at its Outdoor Solutions segment, excluding brands marked for sale, declined 3.2 percent in the third quarter as growth at Pure Fishing was more than offset by declines at Coleman.
“Coleman continues to be a challenge,” Newell CEO Mike Polk said of the company’s $1 billion-plus flagship outdoor brand. “We’re going to lose share this year related to distribution. We’ve gone back into a number of customers and gotten the distribution we lost back for 2017.”
Polk added that one of the segment’s other larger brands, outdoor apparel brand Marmot, “is dealing with the macro issues associated with both apparel and the consequences of last year’s warm weather.”
Newell Brands was formed this year by the merger of Jarden Corp. and Newell Rubbermaid Inc. Jarden Corp. included a $2.74-billion-a-year Outdoor Solutions segment that owns more than 50 sporting goods brands. Newell said Friday that, including results from Jostens, which Jarden acquired in November 2015, sales at the Outdoor Solutions segment increased 12.1 percent.
Still, the group generated an operating loss of $18.7 million, as solid business performance was more than offset by inventory step-up, integration and other costs related to the merger. Integration costs included investing to open two new design hubs in Chicago and New York, increasing investment in brand research and creating a new global e-commerce division that has been tasked with generating $1 billion in new revenue by 2020 across all the company’s segments and distribution channels.
“We do not envision a huge movement forward on direct-to-consumer except in the Yankee Candle business and in selected other businesses, like Marmot and potentially Coleman, and Baby & Parenting,” Polk said. “The reality is that the vast majority of that growth is going to come from brick-and-mortar dot-coms and pure play dot-coms.”
Newell announced plans October 4 to sell about 10 percent of its portfolio, including its winter sports business and a collection of other smaller brands within the Outdoor Solutions Segment; the Heaters, Humidifiers and Fans business within the Consumer Solutions Segment; and the Rubbermaid Consumer Storage business within the Home Solutions segment. The company’s other six segments are Writing, Commercial Products, Branded Consumables, Process Solutions and Tools, the latter of which it has agreed to sell to Stanley Black & Decker Inc. for $1.95 billion.
Outdoor Solutions businesses being sold include: K2 Sports, the Marker, Volkl and Dalbello alpine ski brands and Squadra, which designs and manufactures custom cycling and triathlon apparel. K2 Sports includes K2, 51/50, Morrow and Ride snowboards; K2 and Line skis and Full Tilt ski boots; Atlas, Powderidge and Tubbs snowshoes; Madshus cross-country skis; Backcountry Access avalanche safety gear and K2 in-line skates; and Zoot triathlon running shoes.
Continuing brands that Newell plans to hold onto in the Outdoor Solutions group include Coleman, Marmot, Abu Garcia, Berkley, Shakespeare and nine other fishing brands, Rawlings baseball, basketball and softball game-related product lines, Campingaz, ExOfficio travel apparel, Stearns watersports gear and Jostens, which makes yearbooks, jewelry and other products for K-12 and college schools and scholastic and professional sports teams.
Photo courtesy Marmot
