Newell Brands Inc (NYSE:NWL) fell more than 20 percent on Thursday after the Rubbermaid maker announced that it may sell off assets.
The company announced that it intends to explore strategic options for at least 10 of its consumer and industrial businesses. These include: U.S. Playing Cards, Rubbermaid Outdoor, Rawlings, Goody, Rubbermaid Commercial Products Waddington and Process Solutions.
In the event that Newell proceeds with its restructuring plans, the company’s global warehouse and factory footprint would see a 50 percent reduction.
The company is intend to put its focus on nine main consumer businesses, which have total net sales amounting to $11 billion, around 82 percent of the company’s fiscal 2016 sales.
The decision comes over a year after the company acquired Jarden Corp plus two other consumer giants at $13.22 billion. At the time, investors questioned how difficult it would be to bring together a collection of brands spanning Sharpie Pens, Elmer’s Glue and Yankee Candle. Many of the brands which the company is selling came from the acquisition of Jarden.
Michael Polk, the CEO of Newell Brands said the company has a lot of work to do as it is a big and broad portfolio. He added that they intend to bring together the great leadership team at the company so as to navigate through.
Following the announcement, the company’s stock plunged nearly 22 percent by midday Thursday. Newell shares have shed over 32 percent in the New Year up to close of business on Wednesday. In recent months, many companies that deal in consumer products have seen increasing pressure from retailers, who are struggling to keep prices low so as to attract shoppers as well as manage their inventory.
Domenico De Sole, Ian G.H. Ashken and Martin Franklin have all announced their resignation from the board. The three joined the company’s board as part of the acquisition deal.
Franklin is an investor and is famous for his acquisition vehicles like frozen food-focused Nomad Foods and Jarden. He resigned from the board because he felt had limited influence on the company’s strategy going forward.