Blog: Leonie BarrieSara Lee spin-off

Leonie Barrie | 14 February 2005

Sara Lee’s decision to spin off its apparel business into an independent, publicly traded company certainly seemed to please investors, with shares up 4.1 per cent higher, or 95 cents, to $23.92. The firm’s brands such as Hanes, Champion and Playtex rang up more than $4.5 billion in revenue last year – and the hope is that this will be a mere drop in the ocean once the division is free from the shackles of a large corporate environment. Languishing as it does at the commodity end of the market, there is no doubt that Sara Lee will benefit from the faster reaction times that are inherent in a smaller set-up. 

As for his own track record, the last spinoff overseen by chief executive Steve McMillan was that of Coach Inc in 2000, since when it has churned out sales growth in double-digit percentages every year. Quite a track record, and one that the market will no doubt hope McMillan's successor Brenda Barnes can emulate.


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