Dive Brief:
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Newell Brands, which runs Yankee Candle, Rubbermaid, Elmer’s and other names, will lay off 900 people, about 10% of its global professional and clerical staff. U.S. cuts begin this month and those abroad will continue through next year, the company said Monday.
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In January the company will close about 20 Yankee Candle stores in the U.S. and Canada, which deliver about 1% of the brand’s sales. Most of the company’s 240 or so retail stores, including 230 in the U.S., are Yankee Candle locations; 90% are leased.
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The plan is expected to generate annualized pre-tax cost savings of some $110 million to $130 million, though it will entail $75 million to $90 million in severance and related costs until the end of next year.
Dive Insight:
In October Newell Brands delivered Q3 sales and margin declines that executives largely blamed on tariffs. The company at that point said new levies would cost the company $180 million this year, more than their $155 million estimate from two months before. On an Oct. 31 call with analysts CEO Chris Peterson warned that the “trade disruptions have affected short-term consumer and retailer behavior.”
Newell has been taking steps to mitigate these repercussions, including raising prices where possible, but the topline took a big hit in Q3. Net sales fell more than 7% year over year and gross margin shrank to 34.1% from 34.9%. The company lowered its guidance for full year sales, margins and profits.
“The key challenge for [Newell] here is that visibility is low and debt high,” Wells Fargo analysts led by Chris Carey said in an Oct. 31 client note. At the end of the quarter the company had $4.8 billion in outstanding debt, per Newell’s earnings release.
None of that has been good for the company’s turnaround, initiated in 2023, after Peterson, already president, added the chief executive role to his plate. Newell downsized somewhat last year when it laid off 100 distribution operations workers.
“We’ve made meaningful progress executing our strategy and strengthening Newell Brands, but there is more work to do,” Peterson said in a statement Monday. “This productivity plan is about taking the next, disciplined step to enhance efficiency, sharpen our strategic focus, and deliver stronger, more consistent performance.”
