Newell Brands Inc. lost $50 million in sales in the fourth quarter of 2017 amid a dispute with Office Depot Inc. that saw the maker of Sharpie and Paper Mate products halt shipments to the retailer, The Wall Street Journal reported March 26, citing interviews with Newell CEO Michael Polk and people familiar with the situation.
Newell reportedly stopped some shipments of writing products to Office Depot over a disagreement on terms for marketing and placement. Vendors usually pay retailers a fee for in-store displays, but details of the deal between the two companies were not known.
In his remarks to the WSJ, Polk claimed that Office Depot was not spending enough to promote Newell products, and instead put money toward offsetting decreased sales.
A Newell spokesman told the newspaper that the companies' disagreement was settled but would not elaborate, while an Office Depot spokesman declined to comment on the matter.
Newell's move against Office Depot resulted in a 10% drop in fourth-quarter core sales for its Learn division that includes pens and markers, the report said. On Feb. 16, the company posted a year-over-year drop in net sales to $3.74 billion due to the negative impact from divestitures and acquisitions. The Learn segment accounted for $551.4 million, down from $605.0 million in the prior year.
Following the sales hit, Newell faced a series of director resignations as well as an activist investor that pushed to replace Polk and the company's board, according to the WSJ.
More recently, Newell appointed four board members through an agreement with investor Carl Icahn, who holds a 6.86% stake. As a result, Starboard Value LP, which owns approximately 4.5% of Newell and has been in an ongoing proxy fight with the company, saw the withdrawal of its four director nominees.