Sara Lee transformation taking shape
Sara Lee’s multi-year transformation is on track and beginning to reap dividends, Brenda Barnes, Chairman and Chief Executive Officer of Sara Lee, has told analysts at the CAGNY conference in Florida.
“Sara Lee’s value proposition and prospects for profitable growth are better than at any other time since I’ve been here,” said Barnes, who joined the company in 2004. “And, I’m excited about the tremendous additional opportunities for improvement that will allow us to build on our success and yield strong results going forward.”
Transformation milestones included streamlining the organisation, creating a centralised infrastructure, consolidating the North American and corporate headquarters, and the divestiture or spin-offs that resulted in nearly $3.8 billion of proceeds. The costs associated with the transformation remained on budget, Sara Lee advised.
To counter the impact of a weakening economy and strengthening US dollar in the European market Sara Lee had begun expanding product distribution at hard discounters and convenience stores, continued launching new product and focussed on “affordable essentials” supported by heavy in-store promotions, SKU rationalisation, aggressive cost reduction and pricing actions – where appropriate.
“We believe our recent operating trends, especially in North America, demonstrate the power of the transformation,” Ms Barnes said. “We’ve proven we can deliver cost savings and we will continue to do so through Project Accelerate, which is expected to yield $200 – $250 million in annualised cost savings by fiscal 2011. We’re confident about our long-range performance targets, and we believe that between operational improvements and marketplace success, we will deliver.”