Sara Lee Corp. is seeking a buyer for its bread business, a move that could lead to the breakup or sale of the entire company, reports Crain's Chicago Business. After soliciting bids, Hostess Brands Inc. and Campbell Soup Co.'s Pepperidge Farm showed interest, but Grupo Bimbo S.A. de CV, Flowers Foods Inc., and private-equity firms could end up with Sara Lee's third-largest business with sales of $2 billion.
CEO Brenda Barnes' turnaround strategy, marks a strategic shift. Barnes, who is on indefinite medical leave following a stroke in May, tried for five years to boost bread sales through product innovation and marketing. Speculation is that the bread business could garner $1.1 billion to $1.6 billion or up to $2.4 billion if the company improves the slow-growing unit's low profit margins, according to an analysis by New York-based Bernstein Research. Barnes has sold off nearly half of Sara Lee's business in the past five years, shrinking the company to about $10.8 billion in annual sales from more than $19 billion. Selling the bread business would reduce that number to about $8.6 billion, mostly from sales of meat in the U.S. and coffee overseas. More profitable and faster-growing than bread, the two remaining businesses would be attractive buyout targets to larger food companies.