Newell Brands, which now owns more than 50 sporting goods and outdoor brands after its recent acquisition of Jarden Corp., announced this week it has plans to divest product lines with combined annual sales of $250-to-$300 million over the next two to three years.
Which active-lifestyle industry brands could be on the sales block, will likely depend on the results of a brand equity study expected to be completed sometime in August, the company’s CEO indicated June 16.
“I can tell you with experience that the equity scores are going to surprise us on the high side,” Newell Brands CEO Mike Polk said at the Deutsche Bank Global Consumer Conference in Paris, France. “These are great brands: Coleman, excellent brand; the Yankee, excellent brand; Oster, excellent brand; Rawlings, excellent brand; and the ski businesses, excellent brands. Any brand that evokes nostalgic reflection means that it’s been present and been part of people’s lives. And all of those brands I mentioned jump out like that.”
Yankee Candle and blender maker Oster were part of Jarden’s two other business segments, which enjoy much greater synergy with Newell-Rubbermaid’s brand portfolio.
Polk said the study might not be completed in time for Newell Brands’ next board meeting in August, making it unlikely that the company will begin shopping brands before then.
The company was formed mid-April when Newell-Rubbermaid Inc. acquired Jarden Corp. to create $16-billion-a-year consumer goods behemoth. Included in the deal was Jarden’s Outdoor Solutions segment, which in addition to Coleman, Marmot, Rawlings and a half dozen fishing brands, owns dozens of specialty snow, running, and outdoor brands such as K2, Marker, Volkl and Zoot. The segment’s more than 50 brands generated $2.74 billion in revenue in fiscal 2015.
In a June 15 press release affirming its fiscal 2016 guidance, Newell Brands disclosed the divestitures would slow organic sales growth at Jarden Corp. to 2-4 percent in fiscal 2016, compared with the 3-5 percent target Jarden had set leading into the merger. The guidance also reflects the anticipated impact poor sell through of some ski equipment and seasonal apparel this past winter will have on fall 2016 orders.
“You really learn very quickly the weather impact on the business,” Polk said. “You see the seasonality play through in skis, see the seasonality play through in Marmot.”
When asked which Jarden brands have the most potential for the company’s future, Polk spoke effusively about FoodSaver, Bell and Waddington, as well as Yankee Candle and the company’s baby gear business, which share shelf space at Wal-Mart, Target and Amazon with Newell-Rubbermaid’s FreshWorks and Rubbermaid food container and Nuk baby products.
Pure Fishing and Coleman were singled out as the most promising sporting goods brands, although Polk added a caveat to the latter.
“I think we have some work to do on Coleman,” Polk said of Jarden’s largest sporting goods brand. But I think that brand has amazing potential. The Pure Fishing business is a great business…The Pure Fishing team [is] really adept at driving consumption.”
Jarden recorded a $145.4 million impairment charge in the fourth quarter in what some deemed a prelude to the sale of its winter sports business, which includes K2, Marker and Volkl ski brands; the 5150, Morrow and Ride snowboards brands; the Line and Full Tilt alpine ski brands; the Madshus Nordic ski brand; Backcountry Access avalanche safety gear; and the snowshoe brands Atlas, Powderidge and Tubbs.
–Charlie Lunan
