Newell Brands said it planned to explore selling many of its brands, including Rawlings, to focus on nine core consumer divisions.
Newell Brands acquired Rawlings’ former parent company, Jarden Corp., in 2016. The Rawlings’ business also includes Worth and Miken.
For Newell, the sale comes after spending billions building a conglomerate of household brands. It more than doubled in size when it acquired Jarden two years ago, adding not only the Jarden Outdoor segment that also included Coleman, Marmot and a number of other outdoor brands but also Yankee Candle, Mr. Coffee and other household names.
As part of the realignment, Newell Brands said it is “exploring strategic options for the smaller consumer businesses,” including Rawlings, Goody, Rubbermaid Outdoor, Closet, Refuse and Garage and U.S. Playing Cards. It is also exploring options for industrial and commercial product assets, including Waddington, Process Solutions, Rubbermaid Commercial Products and Mapa.
Newell indicated that the moves will result in a significant reduction in operational complexity through a 50-percent reduction in the company’s global factory and warehouse footprint, a 50-percent reduction in its customer base and the consolidation of 80 percent of global sales on two ERP platforms by end of 2019.
Once the restructuring is completed, Newell Brands expects to focus on nine core consumer divisions with approximately $11 billion in net sales and $2 billion of EBITDA. Sales are expected to reach $14.8 billion in 2017.
In a statement, Newell said the brands it intends to keep are “leading consumer-facing brands with attractive margins and growth potential in global categories.”
The brands also best leverage the company’s internal capabilities around innovation, design and e-commerce.
Besides Rawlings, Newell’s Play segment now include Coleman, Campingaz, Marmot, Contigo and Bubba in the Outdoor & Recreation category; Abu Garcia, Berkley, Shakespeare, Penn and Ugly Stik in the Fishing category and Aerobed.
Other prominent brands owned by Newell that aren’t for sale include Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, Jostens, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Rubbermaid, Contigo, First Alert, Waddington and Yankee Candle.
The sales comes after last year sold off a number of struggling or non-complementary brands, including K2, Marker, Line, Volkl and Ride Winter Sports division, as well as the Zoot and Squadra run and cycling brands acquired in the Jarden acquisition. Also sold were Irwin tools and Levolor window coverings.
Newell Brands intends to begin the evaluation process immediately and expects any resulting transactions to be completed by the end of 2019. Newell expects proceeds from the combined sales after tax to be greater than that required to achieve a leverage ratio below the lower end of its current leverage ratio target range
“We believe that exiting non-strategic assets, reducing complexity and focusing on our key consumer-focused brands will make us more effective at unlocking value and responding to the fast-changing retail environment,” said Michael Polk, Newell’s CEO, 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. As a result, we have chosen to explore these strategic options.”
Founded in St. Louis in 1887, Rawlings was acquired by K2 in 2003 and K2 has was acquired by Jarden in 2007.
Just before K2’s sale, K2’s team sports division achieved sales of $383.4 million. Besides Rawlings, Worth and Miken, the division at the time included deBeer and Gait by deBeer in the lacrosse category and Brass Eagle, Viewloader, JT, Worr Games and Autococker in the paintball category.
Rawlings now focuses on baseball and softball, bats, balls, gloves, catcher’s gear, batting helmets and training accessories. In 2015, it ended production of Rawlings football helmets and football shoulder pads and had in the past produced basketballs, soccer balls and volleyballs.
Rawlings does still sell some footballs and basketballs through licenses with colleges and professional sports leagues and has a line of leather goods. Worth and Miken both focus on softball.
K2 originally acquired Rawlings in early 2003 for about $71 million in stock. Worth was then acquired in September 2003, and Miken Sports in November 2004.
Photo courtesy Rawlings
