NEW YORK — Sara Lee Corp. has entered into an exclusive negotiation period with Sun European Partners for the sale of its branded European intimate apparel businesses, the company said on Friday.
SEP is an affiliate of Sun Capital Partners, a private investment and leveraged buyout firm with offices in Boca Raton, Fla.; Los Angeles; New York, and London.
Sara Lee Coutaulds, the U.K.-based division that manufactures private label apparel for retailers, is not part of the potential sale. Sara Lee said it will continue to evaluate options for the business, which generated nearly $560 million in sales for the fiscal year ended July 2.
Sara Lee’s European intimates business has operations in France, Germany, Italy, Spain, the U.K. and throughout eastern Europe. The businesses generated sales of $1.2 billion in the fiscal year ended July 2.
“The intended sale of the branded apparel business in Europe — which includes great brands such as Dim, Playtex, Wonderbra, Abanderado, Nur Die and Unno — is an important step toward simplifying our portfolio and focusing on growing our core food, beverage and household and body care businesses,” said Brenda Barnes, Sara Lee’s president and chief executive officer, in a statement.
“We look forward to constructive discussions with Sara Lee and the works councils to complete the acquisition of its European intimate apparel business,” said Philip A. Dougall, managing director of SEP, in a statement.
Sara Lee during the quarter and year ended July 2, recognized an impairment loss of $305 million in the European apparel business, with $182 million related to goodwill and $123 million related to indefinite lived trademarks. The company said on Friday that, due to the differences between potential transaction terms approved by the board and other nonbinding bids previously received for the business, Sara Lee conducted another impairment review and concluded that an additional write-down of the business was required. The impairment charge will be recognized in the first quarter of fiscal year 2006, and is expected to be in the range of $165 million.