Newell Names VerticalNet Chief as CEO
Newell Rubbermaid Inc. named VerticalNet Inc. Chief Executive Joseph Galli as its CEO and president, a move that returns Galli to an “old-economy” company after an 18-month-long stint at Internet firms.
The housewares maker, which announced Galli’s hiring Monday as its president and CEO, hopes his reputation for marketing savvy and business discipline can help turn around a company whose fortunes have declined in the last two years.
Galli, 42, was credited with instilling more fiscal responsibility at Amazon.com Inc. during a 13-month stint from 1999 to last July after a long tenure running Black & Decker Inc.’s power tools business. With the vigor of the “new economy” fading, he had less luck running VerticalNet, a business-to-business e-commerce company.
Stock in the Horsham, Pa.-based company, already in free fall when he arrived, is down from $56.75 the day he was hired to $5.31 at the end of last week. News of his departure sent the stock swooning another 26%, or $1.41, to close at $3.91, despite the immediate naming of co-founder and chief operating officer Michael Hagan as the new CEO.
At Newell, Galli succeeds William Sovey, a former chairman and CEO of the company who took over in November after Chief Executive John McDonough resigned during a financially weak fourth quarter.
Shares in Freeport, Ill.-based Rubbermaid rose $1.13 to close at $25 on the New York Stock Exchange.
Galli said he was “coming home” to a traditional company because of his love of consumer products and marketing.
“I think the Internet world continues to hold great promise, and well-managed Internet companies still have a lot of great potential,” he said.
He plans to employ more Internet marketing and procurement strategies at Newell Rubbermaid, where a growing percentage of sales have been coming from new products. The company makes Rubbermaid containers, Levolor blinds, Wearever cookware and other housewares.
“I believe this company can be a juggernaut in the consumer products arena,” Galli said. “Some of our brands are underutilized . . . You’re going to see Newell Rubbermaid become a very sophisticated marketing company.”
Galli succeeds William Sovey, who was chairman and CEO from 1992-97 and took over in November after former CEO John McDonough resigned during a financially weak fourth quarter. Sovey, whom Galli referred to as a mentor, reassumes his position as chairman.
Galli said he hopes to expand Newell’s international sales, which account for 23% of revenue, mostly in Europe.
The company, known as Newell until it acquired Rubbermaid in March 1999, has been struggling to integrate that firm and has missed a series of earnings forecasts since then.
In 1999, the company had profit of $95 million and sales of $6.4 billion.
