The move is more about prestige than headcount. Fewer than 100 high-ranking corporate jobs are expected to return. Because the jobs ultimately aren’t net new positions to Georgia, Newell won’t be eligible for state grants or incentives, a person familiar with the matter said.
Newell, formerly known as Newell Rubbermaid, moved its headquarters to Sandy Springs in 2003 and remained there until after its blockbuster merger in 2016 to Jarden Corp. That year, Newell announced plans to move its top executives to Hoboken, N.J., though the vast majority of the company's 1,000 metro Atlanta workers remained.
Three years later, Newell is returning less than triumphant.
Newell’s performance since the merger hasn’t met shareholder expectations, and integrating Newell with Jarden proved more difficult than expected.
Newell is in the midst of a $10 billion plan to sell off assets after doubling in size through the Jarden deal. Activist shareholders, including billionaire Carl Icahn, forced a change in direction and leadership. Former CEO Michael Polk, the force behind the company’s move to New Jersey, stepped down in March.
Incoming CEO Ravi Saligram, who previously ran OfficeMax and an auctioneering company, is expected to take the helm in October.
Joe Altobello, a senior equity research analyst who covers Newell for financial services company Raymond James, said Newell established its headquarters and e-commerce division hub in New Jersey to be near key customers and to tap into the talent in Greater New York. The return to Atlanta is likely dictated by costs and a desire to locate as many divisions into one place as possible as the company continues to streamline its operations.
Newell’s writing, baby and food divisions are based in metro Atlanta.
In a statement, Newell said the planned relocation was made “in order to facilitate a stronger connection between senior leaders and the operations of the business, and to enhance the company’s culture and sense of community.”
‘One-plus-one equals three’
The Jarden deal added brands such as Jostens yearbooks and class rings, Marmot outdoor clothing and Yankee Candle to a Newell roster featuring Graco baby products, Paper Mate, Sharpie, Elmer’s Glue and Goody hair accessories.
Some analysts applauded the merger, but others questioned how Newell would knit together so many brands spanning sports, food, baby goods, office supplies and small appliances.
“There are cross opportunities really that you don’t intuitively think about until you unpack this,” Polk once told CNBC.
The next year when the merger closed, the company announced plans to spin off some brands, but executives touted the company’s opportunity for growth.
The deal saddled Newell with debt and made two companies with dizzyingly complicated supply chains even more complex.
“It’s not so much that these were bad businesses or run poorly,” Altobello said. “But Newell was a complex business and Jarden was a complex business. It’s a situation where one-plus-one equals three in complexity, and that’s not a good thing.”
Newell also missed sales forecasts and management soon found itself at odds with the board, including Jarden’s former CEO, as well as activist investors. The company soon launched a plan to sell off some $10 billion in assets, including Jostens, Goody and Rawlings sporting equipment.
Carnage in the U.S. retail sector, which saw sellers of Newell products such as Toys ‘R’ Us go into bankruptcy, contributed to Newell troubles, Altobello said. Newell shares closed Friday at $15.34, or less than a third of their peak value in 2017.
Still, the company is on a path to right itself, Altobello said.
‘They like Atlanta’
On Friday, metro Atlanta’s business leaders were in a celebratory mood.
Hala Moddelmog, president and CEO of the Metro Atlanta Chamber, said her group was not involved in recruiting the company but stands ready to assist Newell as it relocates its personnel.
“They like Atlanta and they know Atlanta is where they needed to be,” she said.
Kennesaw State University economist Roger Tutterow said Newell’s exit in 2016 was an anomaly at a time when the Atlanta region was winning companies such as homebuilder PulteGroup and the North American headquarters of Mercedes-Benz.
“Atlanta has had so many good economic development wins over the past 10 years that when Newell moved out it was one of the few negatives,” he said. “It’s now a chance to reverse that.”
Still, 2019 has been a mixed bag for metro Atlanta and headquarters recruitment.
In January, financial technology company Fiserv announced a $22 billion marriage with Sandy Springs-based First Data that would base the combined company near Milwaukee. Atlanta-based SunTrust, meanwhile, is expected to soon complete its merger with Winston-Salem, N.C.-based rival BB&T. The merged banks will be known as Truist Bank and be based in Charlotte.
At the end of 2018, Norfolk Southern confirmed its plans to relocate from Virginia to Atlanta. The railroad giant broke ground on its new Midtown campus in March.
Staff writer Greg Bluestein contributed to this report.
Brands: The company's brands include Crock-Pot, Calphalon, Graco, Marmot, Oster, Paper Mate, Parker pens and Sharpie
Financials: On Friday, Newell reported net sales of $3.8 billion for the first six months of 2019, down 4.6 percent compared to the same period a year ago. Newell reported a loss of $61.4 million from January to June this year, compared to a $185 million profit for the first half of 2018.
HQ Location: 6655 Peachtree Dunwoody Road, Sandy Springs
Source: Newell Brands
It’s not unheard-of for a company to skip town only to return some years later. In 2017, Atlanta-based internet services provider Earthlink was acquired by rival Windstream for $1.1 billion, basing the combined company in Little Rock, Ark. But two years later, a private equity firm bought Earthlink and re-established its home office in Midtown. First Data, which processes electronic payments, moved its headquarters from Sandy Springs to Denver in 2001 only to return in 2009. But in January, Wisconsin-based Fiserv announced a $22 billion merger with First Data, with the combined company to be based outside Milwaukee.