POLO ENDING SARA LEE LICENSE
Byline: Evan Clark
NEW YORK — Polo Ralph Lauren Corp. reported Friday it will discontinue its licensing agreement with Sara Lee Corp. to manufacture and distribute its women’s intimate apparel upon expiration of the arrangement this spring.
On the other hand, Polo extended its men’s underwear licensing agreement with the widely diversified Sara Lee. Details of the extension were not available at press time.
Doug Williams, Polo’s group president, global business development, said in a statement: “We have decided not to renew our license agreement with Sara Lee for Ralph Lauren Intimates as we further focus the Ralph Lauren women’s brand on luxury product categories.”
A Polo spokeswoman told WWD there currently were no plans to shift the licensing agreement to another company.
A Sara Lee spokeswoman said about 60 jobs will be affected by the discontinuation of the license. “We are hopeful and optimistic that we will be able to find opportunities for some of those people as the year goes on,” she said.
The news comes just days after Sara Lee outlined plans to lay off about 7,000 employees, mostly in its intimates and underwear business.
The reduction will trim about 4.5 percent off of the company’s 154,000 global workforce.
The layoff will occur “over the course of the next 12 months and will affect North America, Europe and Latin America,” said another company spokeswoman. “We’ve communicated with our employees about this, but we have not finalized our plans yet. This is a continuation of our reshaping program.”
As reported, Sara Lee, under the leadership of C. Steven McMillan as its new president and chief executive, last May outlined plans to focus the Chicago-based conglomerate on its core businesses as a global branded consumer packaged goods company with large interests in the food and apparel sectors.
Sara Lee’s second-quarter results, made public last week, included a $344 million restructuring charge — about a third of which went toward anticipated expenses related to the layoffs. The reduction is expected to save the company $44 million to $50 million annually by fiscal 2003.
The other two-thirds of the charge will go toward the divestiture of eight additional businesses, including Champion Europe, Apparel Australasia and six food-related businesses, bringing its total planned divestitures since last May to 14.
In the quarter, Sara Lee’s Intimates and Underwear unit’s sales were up 8.8 percent to $2.13 billion while operating income rose 9.9 percent to $278 million.
The eight additional businesses leaving Sara Lee will further reduce its workforce by about 3,500 to 4,000 employees, noted the spokeswoman.
Sara Lee markets brand name intimate apparel and underwear including the Hanes, L’eggs, Just My Size and Wonderbra brands.