Newell to Focus on Key Brands in Emerging Markets

Newell Rubbermaid Inc. (NWL) Chief Executive Officer Michael Polk said the company will shift more of its resources to the developing world, focusing on key brands and taking advantage of trends such as rapid urbanization.

“Our financial resources will shift, south and then east,” Polk said yesterday in an interview in Boca Raton, Florida. That includes an emphasis on Brazil, Mexico and China, where Newell can sell its Lenox saws to a market that consumes 43 percent of the world’s steel supply.

Polk took over the maker of Sharpie pens and Calphalon cookware in July, after serving as the head of Unilever NV’s foods, home and personal-care business. He’s reduced operating units to two from three, cutting 500 jobs, and says he’ll shift savings into brands with high growth potential like Paper Mate pens.

Last year, 87 percent of Newell’s sales were generated in the U.S., Canada and Europe, while about 80 percent of its growth comes from the developing world. Like other household- products makers, Newell has had to contend with higher raw- materials costs and slow-spending consumers in mature markets, along with a low birth rate.

Newell also would consider acquisitions to fuel expansion in high-growth areas such as commercial products and tools, Polk said.

“There’s some really interesting opportunities around the world,” Polk said, although a purchase this year is unlikely because the company first wants to build out distribution and other infrastructure in key markets, he said.

Predecessor’s Restructuring

Newell can enter fast-growing markets after a multiyear restructuring led by his predecessor, Mark Ketchum, Polk said. “That job had to be done first,” he said.

Ketchum, who served as CEO from 2005 until he retired last year, closed plants and sold less-profitable product lines to invest in higher-margin brands.

Newell, with $5.86 billion in sales last year, has forecast 2012 profit before some costs of $1.63 to $1.69 a share, compared with $1.68, the average estimate compiled by Bloomberg. Currency effects will trim earnings by 4 cents to 5 cents a share, Polk said on a Jan. 27 conference call.

To contact the reporter on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.