Newell and VF: How to Kill a Consumer Goods Giant

I’ve taken a bit of time off from blogging recently to focus on other things, but recently came across this article from the WSJ about the fall of VF Corp ($VFC) and it reminded me of other legacy brand aggregators, such as Newell Brands ($NWL), that have also struggled as of late. There is a common strategy across both companies – they chose to concentrate key decisions around marketing, product development, and sales at the corporate versus brand level. And the results clearly show that was a mistake. 

Share this:

Stock Buybacks Aren’t Always Good

Less than half of the S&P 500 invest any money in R&D. Instead, they are pumping dollars into stock buybacks that ultimately provide no real tangible value to the productivity of the enterprise (sorry Warren). I’m convinced this is stifling innovation and giving startups more room to eat their lunch. Wall Street has no patience when it comes to waiting around to see innovation bare fruit which can sometimes take 4+ years. The unfortunate reality of this is management must then live by a quarter-to-quarter clock which hurts internal innovation. This myopic perspective is further reinforced by hedge funds and activist investors who are chasing short term gains. Allocators of capital need to recognize that management has to be given more leeway to invest for the long run. If they don’t, a heavily funded lean startup will be glad to take their customers.

Share this: