Procter & Gamble (P&G), the world’s biggest producer of household products, plans to sell up to 100 non-core brands in a bid to revive sales growth and reduce costs.
The US multinational, based in Cincinatti, Ohio, aims to focus on 70 to 80 core brands, such as Tide washing powder and Pampers disposable nappies, which have accounted for 90% of sales and over 95% of profit over the past three years. Of these, 23 brands have annual sales of between US$1bn and US$10bn.
Some 90 to 100 other brands, which have suffered annual sales declines of 3% over the same period, will be put up for sale within the next 12 to 24 months. Many of them have annual sales of US$100m-US$500m
“We’re going to create a faster-growing, more profitable company that is far simpler to manage and operate,” P&G’s chief executive (CEO), AG Lafley, told investors during a conference call. “Less will be much more.” He added that the company had delivered on its business and financial commitments over the past year, but “we could have and should have done better.”
P&G’s revenue growth has been modest in recent years, due to a combination of ‘choppy’ growth in developed markets, tough competition and a stronger US dollar in many regions.
The company has sought to cut expenses by streamlining management, lowering overhead and marketing costs, and cutting jobs under a five-year, US$10bn restructuring plan announced in February 2012.
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