Sara Lee becoming a food company again

02/10/2005

Chicago-based Sara Lee Corp. announced a "comprehensive transformation plan" February 10 that included a new CEO, the spin-off of its $4.5 billion apparel business and the sale of some food businesses, including its U.S. coffee lines.

Chairman C. Steven McMillan is handing over the CEO reins to Brenda Barnes immediately, a little faster than observers expected. He will retire from even the chairman’s job after the annual shareholders meeting in October. "We recruited Brenda last year to be my successor," said McMillan. "Brenda has played a key leadership role in designing our transformation plan and, for continuity and focus, it is appropriate that she lead its execution from the outset."

Sara Lee will reorganize its business operations around distinct consumers, customers and geographic markets. A month earlier, the company said it was exploring the sale of its $1.8 billion European apparel business. Now, the company plans to spin-off of the balance of its apparel business into an independent, publicly traded company. Richard Noll, current chief executive officer of Sara Lee Bakery Group, will move over to be president/COO of the apparel business.

On the selling block are a $1.1 billion packaged meats business in Europe; the $300 million U.S. coffee business (with brands such as Chock Full o’Nuts, Hills Bros., MJB and Chase & Sanborn, but not including the fast-growing Senseo brand); and Direct Selling, a $450 million business that sells cosmetics, household products, apparel and other products around the world.

All these divestitures represent $8.2 billion in sales, approximately 40 percent of the company’s annual revenues. After nearly 25 years with the company, Robert Kopriva, CEO of Sara Lee Foods, will retire in June, the end of the company’s fiscal year.