Newell Companies, Inc.
List of Deals
Newell Co. traces its roots to the short-lived W. F. Linton Company, which was incorporated in 1902 to make brass curtain rods. The company went bankrupt the following year. Edgar A. Newell took control of the company and renamed it Newell Manufacturing Company, Inc. Newell hired his son, Allan, to run Newell Manufacturing and started a new company, Newell Manufacturing Company Ltd. (Newell Ltd.), in Prescott, Canada. Newell Manufacturing's initial product line was composed exclusively of brass curtain rods, created through a method of tube making that utilized a waterwheel. In 1908 the company began producing a greater variety of curtain rod shapes after adopting a new, faster, and more adaptable manufacturing process that used roll-forming machines. By the end of the decade the company's annual sales were about $50,000.
By 1912 Newell Ltd. discovered that curtain rods were not enough to keep its operations afloat. Through that year and the next, Newell Ltd. expanded its plating department in order to produce a variety of products, including towel racks, stair nosings, ice picks, and other items requiring a finish of brass, zinc, or nickel. The expanded product line spurred additional sales, and Newell Ltd. soon became profitable. During World War I, the cost of brass rose, causing Newell to hire the Baker Varnish Company to devise a new metal-coating method tailored to Newell's roll-forming manufacturing process. By 1917 Newell's curtain rods were being coated with a nontarnishable lacquer. Not only were the new rods cheaper to produce than brass rods, but because they wouldn't tarnish, they were better suited to lace and ruffle curtains. With its new curtain rod Newell won the business of Woolworth stores, after agreeing to buy out Woolworth's on-hand stock of curtain rods. This move soon boosted sales and helped to establish the company's first long-term relationship with a major national retailer.
In 1921 the company opened a new curtain rod factory in Freeport, Illinois. The new business, Western Newell Manufacturing Company, was designed to take advantage of local railroad transportation and serve as a western branch of Newell Manufacturing. The company quickly became profitable. By 1928 Western Newell's sales had grown to $485,000, more than twice that of Newell Ltd. and about half that of Newell Manufacturing. At the time of the stock market crash in 1929, Western Newell was producing a wide variety of drapery hardware, including extension curtain rods, ornamental drapery rods, and pinless curtain stretchers. The Newell companies made it through the Depression years without falling into the red, although they were forced to lay off workers and reduce workdays. In 1933 Western Newell earned $61,000 on sales of $320,000, whereas Newell Manufacturing earned $47,000 on sales of $425,000. By 1937 Western Newell had surpassed Newell Manufacturing in both revenues and income.
Between 1938 and 1939 Newell Manufacturing established a third domestic factory, this one in Los Angeles, and made its first acquisition, Drapery Hardware Ltd. of Monrovia, California (DRACO), a maker of wooden and heavy iron drapery fixtures. During World War II, the Freeport factory won a coveted Army/Navy "E" Award for excellence in wartime production, churning out more than 230 million metallic belt links for machine guns within a two-year period. During the postwar decade the Newell companies enjoyed steady growth, although no new manufacturing plants were started or acquired.
During the early 1960s Newell acquired the rights to additional drapery hardware brands and names, including Angevine and Silent Gliss. In 1966 all Newell companies were consolidated into one Illinois corporation, Newell Manufacturing Company. During the 1970s Newell continued to acquire other companies, greatly expanding its product line in the process. In 1968 Newell purchased a majority interest in Mirra-Cote Industries, a manufacturer of plastic bath accessories. In 1969 Newell acquired Dorfile Manufacturing Company, a maker of household shelving, and E.H. Tate Company, which brought the "Bulldog" line of picture-hanging hardware into the Newell line of products. During the late 1960s DRACO began phasing out of manufacturing operations and finally closed its doors in the early 1970s. In 1970 the company was reincorporated in Delaware as Newell Companies, Inc. The following year Newell added sewing and knitting accessories to its product line when it acquired the Boye Needle Company, a world leader in knitting needles and crochet hooks, and Novel Ideas, Inc., another maker of do-it-yourself sewing materials.
In April 1972 the company went public as an over-the-counter stock; that same year it initiated an acquisition strategy that would later be replayed in various forms. Newell made an offer to buy EZ Paintr Corporation, a paint and sundries company in which Newell already had a 25 percent stake, and EZ Paintr in turn filed a pair of lawsuits to fight back against a possible takeover. In February 1973 Newell gained majority control of EZ Paintr after its president sold his family's interest in the company.