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Newell Rubbermaid Inc. (NWL - Analyst Report) recently announced the closure of its Hardware business sale to Nova Capital – an expert buyer of corporate and private equity portfolios – for $214 million, including accounts receivable. The deal was declared on Aug 9, 2013.

The after-tax proceeds are likely to be around $175 million. The hardware business comprises four brands, namely Amerock, Ashland, Bulldog and Shur-Line, which together are expected to generate revenues of approximately $255 million for 2013.

In May 2013, Newell Rubbermaid had declared that it was looking for prospective buyers to offload its Hardware and Teach Platform businesses. According to the company, these businesses were not in line with its ‘Growth Game Plan’ strategy as announced in Oct 2012. Under the particular strategy, the company intends to lay off approximately 10% of the workforce, build a new organizational model as well as leadership team.

In Jul 2013, Newell Rubbermaid vended its Teach Platform business to a Beverly Hills, Calif. based private equity firm, Skyview Capital, LLC. Newell’s Teach Platform business includes the Mimio and Headsprout interactive teaching technology brands. The terms of the deal were not disclosed.

We believe that the recently concluded transaction will enable Newell Rubbermaid to build an organized portfolio in the existing five fundamental business segments, namely Home Solutions, Writing, Tools, Commercial Products and Baby & Parenting. Consequently, it will provide the company the upside to grow through innovation, brand augmentation and by availing opportunities in emerging economies.

We believe that the overall growth plan will help Newell Rubbermaid to reduce the complexities of the organization, boost customer services and sourcing functions as well as increase investments in the core business areas. The long-term growth plan, which is expected to be fully implemented by the end of second-quarter fiscal 2015, will save approximately $180–$225 million annually.

Newell Rubbermaid currently carries a Zacks Rank #3 (Hold). Some other stocks in the retail sector that are worth a look include Citi Trends, Inc. (CTRN - Analyst Report), Kirkland's Inc. (KIRK - Analyst Report) and PCM, Inc. (PCMI - Snapshot Report). All of these carry a Zacks Rank #1 (Strong Buy).

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