P&G Trims Product Lines to Focus on Brands That Make Money
Rhona Arcaya | | Aug 05, 2014 06:53 PM EDT |
In a move to streamline its business, consumer goods manufacturer Procter & Gamble (P&G) is taking as many as 100 brands off its product list.
The company, which makes products ranging from pet food to perfumes, said the decision was part of a strategy to focus on brands that drive up sales and profits.
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"This new streamlined P&G should continue to grow faster and more sustainably, and reliably create more value," according to the firm's CEO, A.G. Lafley.
The chief executive said the brands that would be affected by the move together had annual sales declines of 3 percent over the last three years.
He did not identify the brands that the company would either discontinue or put up for sale.
But analyst Ali Dibadj, who works at Sanford C Bernstein & Company, mentioned Zooth, Graham Webb and Trojan as among the likely candidates.
P&G will retain about 70 to 80 products, most likely including well-known brands like Tide, Pampers and Gillette, which have been its bread and butter for years.
But sales were not the only consideration in the product revamp, according to Dibadj.
He said P&G might also get rid of brands that do not fall in the same category as its traditional family and baby products, such as Duracell and Braun.
Duracell makes batteries, while Braun specializes in electronic hair removal products.
A number of P&G beauty lines might also be headed for the exit as sales in the unit decreased 3 percent, according to RBC Capital Markets analyst Nik Modi.
While Dibadj did not expect Pantene, Olay and Cover Girl to go, he speculated that Naomi Campbell's perfume and cologne lines and Federic Fekkai hair care products would be included in the cuts.
P&G's latest strategy comes amid pressure on the company to reduce costs and boost sales as consumer spending after the 2009 financial crisis remains sluggish.
Tagsprocter & gamble, P&G, A.G. Lafley
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