* To cut more than 10 pct of global staff over next 2 1/2
* To consolidate manufacturing, distribution facilities
* Quarterly profit tops analyst estimates; sales in line
* Raises quarterly dividend by 50 percent; names execs to
* Newell stands by full-year profit outlook
By Dhanya Skariachan
Oct 26 Consumer products maker Newell Rubbermaid
Inc said it would cut about 2,000 jobs or slightly more
than 10 percent of its staff, over the next 2 1/2 years, joining
a slew of U.S. companies trying to counter slowing sales by
The news on Friday came as Newell also reported a
higher-than-expected quarterly profit, raised its quarterly
dividend by 50 percent to 15 cents a share and announced a
number of outside additions to its executive team.
The maker of Sharpie pens and Rubbermaid storage containers
is also planning to consolidate manufacturing and distribution
facilities and cut the number of its business units to six from
nine as part of a second round of restructuring under Chief
Executive Officer Mike Polk.
"I see more potential in our business today than I imagined
upon joining the company 15 months ago," Polk said in a
statement. A former Unilever executive, he became CEO
of Newell in July 2011.
As part of the latest restructuring, Polk is reorganizing
the company around two broad groups - development and delivery.
The development group will include all of Newell's
marketing, insight, design, research and development, and
corporate development staff, while the delivery group will
consist of its general management, supply chain, and customer
and channel development employees.
As part of the changes, Penny McIntyre, who headed Newell's
consumer business; Chief Marketing Officer Ted Woehrle; and
Chief Customer Development Officer Paul Boitmann will leave the
company, it said.
The moves will bring savings of $180 million to $225 million
by the end of the second quarter of 2015, the company said. It
expects to take related charges of $225 million to $250 million.
In October 2011, Polk announced plans to consolidate
Newell's manufacturing plants and distribution centers and to
reduce the number of global business units.
The company, whose other products include Graco strollers,
Calphalon cookware and Paper Mate pens, has also benefited from
a move away from commoditized, lower-margin product categories
like shelving and wooden pencils. That effort began under former
Newell reported third-quarter net income of $108.3 million,
or 37 cents a share, compared with a year-earlier net loss of
$177.6 million, or 61 cents a share.
Excluding restructuring costs, tax charges and other items,
the profit came to 47 cents a share, beating the analysts'
average estimate of 44 cents, according to Thomson Reuters
Price increases and measures to improve productivity helped
Newell offset high raw material costs in the quarter.
Net sales fell 0.9 percent to $1.54 billion, in line with
analysts' estimates. Core sales, which exclude the effects of
currency fluctuations, rose 1.5 percent. For the year, the
company expects net sales to be flat to up 1.5 percent and core
sales to rise 2 percent to 3 percent.
Newell stood by its full-year profit forecast of $1.63 to
$1.69 a share, excluding special items.
Earlier this week, companies from Dow Chemical to
Colgate-Palmolive said they would cut jobs to protect
profits in a weak global economy.
Also as part of the restructuring, Newell hired several
Unilever executives and announced other management changes.
Mark Tarchetti, the former head of global corporate strategy
at Unilever, will join Newell in January as chief development
officer and lead the new development group.
William A. Burke III, currently Newell Professional's group
president, has been appointed chief operating officer and will
lead the new delivery group.
Both Tarchetti and Burke will report to CEO Polk.
Unilever executive Joe Cavaliere will join Newell as global
chief customer officer. Richard Davies, also with Polk's former
employer, will become chief marketing and insights officer.
John Stipancich will remain Newell's chief legal officer and
general counsel while taking charge of operations in Europe, the
Middle East and Africa.