NEW YORK — Sara Lee Corp. is shedding some assets, and several industry experts like the potential view.
Sara Lee’s announcement Thursday that it plans to spin off its apparel business into an independent, publicly traded company is being viewed by industry executives as a hugely influential role model and a positive boost for apparel business overall.
While many recognize Sara Lee for its cheesecake and Ball Park hot dog brands — a line of business the company plans to consolidate into a tightly focused food, beverage and household products company — the company has one of the best-known portfolios of apparel brands on the planet, with names that have worldwide recognition such as Playtex, Hanes, Hanes Her Way, l’Eggs and Champion. A stand-alone apparel company would be able to make investment decisions that have nothing to do with the food or coffee markets.
The announcement to shed all of its apparel businesses including its operations under the Americas-Asia territories follows a bombshell last month in which Sara Lee said it was exploring the sale of its $1.8 billion European apparel business. The brands hold the number-one share of the intimate apparel and underwear markets in the U.S., and the second spot in commodity fleece and activewear, according to industry estimates.
One executive who did not want to be identified, but is familiar with Sara Lee’s branded apparel businesses put it this way: “Apparel and food are two different animals. Sara Lee had a difficult time being in multiple markets and when decisions were made, it was like apples and oranges. Neither business got optimized. But I think the troubling thing is the plan is to still sell the European [apparel] business. I think their apparel business would be stronger if it was global like VF.”
The change in direction for its apparel business was part of a restructuring of the company’s operations that included the appointment of Brenda Barnes as chief executive officer. Barnes replaced C. Steve McMillan, who will stay on as chairman until October 2005 to oversee the divestitures and help in the transition.
“We are confident branded apparel has a tremendous future and will flourish in today’s marketplace as an independent, publicly traded company,” McMillan said in a statement.
Hermès is launching a Laundromat pop-up shop in NYC - dubbed Hermèsmatic - where customers can bring their old scarves to be dip-dyed by an expert. Get all the details on WWD.com. #wwdnews (📷: @donstahl)