Sara Lee confirms interest in selling personal care business
The $2.3bn business segment employs 8,000 people and produces major personal care brands such as Sanex, Radox and Brylcreem.
Interest in the business
In a regulatory finding with the SEC, Sara Lee explained that the company had received “expressions of interest” in its household and body care business and is now considering the option of selling.
The company did not comment on who the interested parties are but possible buyers are likely to be found among rivals like Unilever, Reckitt Benckiser and Procter & Gamble.
Sara Lee CEO Brenda C. Barnes said: “We will carefully evaluate all opportunities and do what is in the best interest of the company and its stakeholders.”
Trimming Sara Lee down to size
Selling off the Netherlands-based household and body care segment will trim down the size of Sara Lee, which has already slimmed significantly over the past decade.
Following several major divestments, including the sale of its direct sales cosmetics business to Tupperware in 2005, Sara Lee’s annual turnover has fallen from $19.7bn in 1997 to $13.2bn in the fiscal year 2008.
If Sara Lee now decides to sell its entire household and body care business, the company would be reduced to a food and beverage operation.
Investors have been positive about the possibility of a smaller and tighter Sara Lee although one analyst interviewed by the Chicago Tribune questioned the timing.
“The business is very economically sensitive and at this point selling it is not a good idea,” said Robert Moskow, a stock analyst at Credit Suisse.
Sara Lee itself has been sensitive to the economic situation and in quarterly results published in February the company announced a loss of $17m, compared to a profit of $182m in the corresponding period last year.
