Sara Lee consolidates corporate operations

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Sara Lee says it will relocate its corporate headquarters in one
building in Chicago, Illinois, ahead of the planned disposal of its
European personal care operations, writes Simon Pitman.

The company said that its new corporate headquarters will be located at Locust Point business park in Downers Grove, on the outskirts of Chicago. The facility will be the new home to the majority of Sara Lee's corporate staff as well as the company's North American operating businesses.

The move falls in line with ambitions to consolidate its operations in an effort to promote long-term growth and performance. The plan, which was first announced 10 February, will see the company's business forged upon three pillars: organizing its business operations around consumers, customers and geographic markets; focusing its portfolio; and increasing operational efficiency to fund growth.

Currently the company is divided into three principal business areas that include food and beverage, apparel and household products. Alongside shoe cleaning products and air freshening products, the personal care division forms the majority of the company's household products division.

Both the company's apparel and its household divisions have been holding back its financial performance in recent years, leading industry experts to believe that some pretty rigorous cut-backs as it gears up towards its the spin off of the two divisions.

Last week the company announced that it was cutting back on 350 jobs in the company's apparel division to create a leaner operation in time for the division's planned sell off between March and July next year.

Meanwhile the company has already started to sell off some of its household division brands. Last month it announced that it had sold three of its Australian household brands to Australian company Symex. The deal is due to be completed at the end of the year and will serve to increase Symex's presence in the Australian household and personal care categories.

Currently the Sanex body care brand is the company's most prominent personal care brand. Other brands include Badedas, Delial, Monsavon and Matey, which have enjoyed international success, particularly in various European markets.

"In transforming Sara Lee into a premier consumer products company focused on food, beverage and household products, we are undergoing a dramatic culture shift from a collection of companies to a single operating enterprise. A critical part of our transformation strategy is that - for the first time in Sara Lee's history - we are bringing operating management together in a single location, where they will also be joined by the corporate staff,"​ said Brenda Barnes, president and chief executive officer, Sara Lee Corporation​.

As part of the transformation, the company is moving its bakery and packaged meats businesses from St. Louis and Cincinnati, respectively, as well as its beverage business in Rolling Meadows, Illinois, to the Downers Grove location to form two business segments: Sara Lee Food & Beverage and Sara Lee Foodservice.

The personal care division will continue to be overseen from its headquarter in Utrecht, Netherlands, until the spin off process is completed year, which should be mid-2006. At the end of last month the company announced financial results that were largely flat in the face of continuing challenges in the US retail sector. Sales for the nine months were up 3 per cent to $14.8 billion, compared to the corresponding nine months up to 31 March 2004.

In the nine months to 31 March of this year, the company reported that sales for its household division were up 2.3 per cent, from $1.743 million to $1.782 billion.

Body care sales also showed little change in the last quarter, as favorable currency effects and increases in the Sanex brand were offset by declines in other brands. This was mainly due to the very competitive conditions in the European market where a retail war is being hard fought.

Looking to the future, the company said that the launch of the Sanex for men range in various European countries was likely to have a positive impact on sales during the rest of the year.

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