SARA LEE SELLS AUSTRALIAN UNIT
Byline: Arnold J. Karr / With contributions from Arthur Hagopian, Sydney
NEW YORK — Continuing to shed noncore apparel assets, Sara Lee Corp. said Monday it had agreed to sell its Australian apparel operations to Pacific Dunlop Ltd. for $31.5 million.
The acquisition of Sara Lee’s Australian and New Zealand unit — principally hosiery, sportswear, workwear and intimate apparel operations — is expected to add approximately $105 million in sales to Pacific Dunlop, which last year had revenues of $683 million. Dollar figures have been converted at current exchange.
Following consummation of the transaction, expected next week, Pacific Dunlop will own the Australian and New Zealand apparel brands Razzamatazz, Formfit and Kayser hosiery, Stubbies shorts and King Gee workwear. Sara Lee’s Hanes, Playtex and Wonderbra have been licensed to Pacific Dunlop by Sara Lee.
Rod Chadwick, chief executive of Pacific Dunlop, said, “The Sara Lee Apparel businesses are a near-perfect fit and an outstanding growth opportunity for our own branded apparel business. Added to our existing stable of brands, they will strengthen Pacific Dunlop’s position as home to the strongest lineup of icon brands in Australasia as well as take us into profitable new product categories.”
The company’s focus, “which this acquisition and the recent acquisition of Clarks Shoes demonstrate, is now on growing our branded distribution businesses,” he said. The firm’s brands include Bonds, Berlei, Jockey, Rio, Amco, Everlast and Lightning Bolt.
He expects the acquisitions to make a positive contribution to earnings in the coming year.
In a statement, Sara Lee ceo Steven McMillan said, “Sara Lee Apparel Australasia generates nearly half of its annual sales from workwear and casual clothing, which we no longer consider core categories for our company.”
The divestiture brings Sara Lee’s exit from noncore businesses, originally announced last May, one step closer to completion. As reported, that plan, which calls for the disposal of apparel operations outside the areas of intimate apparel and underwear, has resulted in the spinoff of Coach through an initial public offering and, just last week, the sale of Champion’s college bookstore operation to privately held Gear for Sports.
The firm indicated last month that it had found a buyer not only for its Australian apparel operations but also for those of its Champion Europe unit. The Chicago-based conglomerate has elected to retain its noncollegiate U.S. Champion business and will sell the 81 percent of Coach not sold through last October’s IPO through a stock swap.