Milling & Baking News - June 1, 2010 - 10

Business 

With turnaround specialist at helm,
questions about Sara Lee baking unit
Continued from Page 1

no one is asking to buy it," Mr. Moskow said in a May 26 report titled "A
Different Sara Lee." "They run it for
value, and they are generating cash.
Interestingly, they replaced the G.M.
position with a turnaround specialist with experience bringing companies out of bankruptcy.
Sara Lee has big savings targets for fiscal
year 2011. We believe
they would love to sell
it if they can figure out
how to separate themselves from the Sara Feder
Lee bread brand name.
Would they buy Maxwell House or
Oscar Mayer with the proceeds? Only
if it gives them distribution cost synergies with customers or suppliers on
a regional basis. They have already
reached full scale on their coffee bean
and protein procurement."
Mr. Feder's firm, AlixPartners,
offers guidance around four areas:
operational performance improvement, financial restructuring and
bankruptcy reorganization, litigation consulting and financial advisory services.
"The firm's expertise is in helping
clients anticipate, evaluate and successfully resolve urgent, high-impact
business challenges in an increasingly complex legal, regulatory and economic landscape," the company said.
The company said its founder, Jay
Alix, has been c.e.o., chief operating officer and chief financial officer
of a number of companies dealing
with major change. AlixPartners also
credits Mr. Alix as having "invented,

developed and served in the roles of
chief turnaround officer and chief restructuring officer." He established
the business in 1981.
In a biography of Mr. Feder offered
by AlixPartners, he is described as
"adept at pursuing and implementing creative solutions for troubled
and underperforming companies."
His previous experience included
serving as interim c.o.o. of Bally Total Fitness when the company was
emerging from Chapter 11 bankruptcy; an adviser to Calpine Corp.,
a utility that also filed for bankruptcy
protection; chief restructuring officer
of Avado Brands, Inc., a casual restaurant operator; chief restructuring officer of DIRECTV - Latin America; and
adviser to dj Orthopedics in a profit
improvement initiative. AlixPartners
said the effort resulted in a tenfold
increase in stock price.
"His extensive experience allows
for a unique platform to provide
transitional and crisis management
to organizations experiencing
financial challenges," AlixPartners said. "Michael has served
in a variety of interim officer
and advisory roles where the results were long-term operating
and financial stability. He has
strong financial and operating skills and is accomplished
at managing under liquidity constraints, implementing
cost reductions and responding to the competitive pressures that result from changing markets."
Mr. Feder, who is based at
AlixPartners office in Chicago,

Sara Lee changes timing to
share buyback plan
DOWNERS GROVE, ILL. - Sara
Lee Corp. last week said it will
amend the timing of its 2010
share repurchase plan by using a
portion of the proceeds from each
of its pending Household & Body
Care transactions to buy back up
to $800 million of its shares.
Sara Lee said its $500 million
accelerated stock repurchase program, which was announced in
March, is expected to be completed
10 / June 1, 2010 Milling & Baking News

later this summer. Once completed, the company said it will begin
the share buybacks as the Household & Body Care transactions
close.
The $800 million in share buybacks are part of Sara Lee's larger
commitment to repurchase $2.5
billion to $3 billion of stock over a
three-year period, with $1 billion
to $1.3 billion expected to be repurchased in calendar 2010. MBN

holds a master's degree in business
administration in finance from New
York University's Leonard N. Stern
School of Business. He holds a bachelor's degree in economics from the
University of Michigan.
Sara Lee represents the latest
among a number of grain-based
foods companies to seek assistance
from turnaround specialists in recent years.
Alvarez and Marsal was engaged
by Interstate Bakeries Corp. in September 2004 and by American Italian
Pasta Co. in September 2005. In both
cases, Alvarez managing directors
served as chief executives for longer than two years. In January 2005,
Stephen F. Cooper, chairman of the
turnaround firm Kroll Zolfo Cooper
L.L.C., was named c.e.o. of Krispy
Kreme Doughnuts, Inc. Mr. Cooper
served as Krispy Kreme c.e.o. for a
little longer than a year.
The Sara Lee engagement differs
from the others in that it is a grainbased foods division of a larger corporation rather than a corporate-wide
engagement.
Mr. Moskow was favorably impressed with progress made by
Sara Lee.
"Sara Lee is simply a better
business now," he said. "More
sophisticated systems and experience are setting the right price
at retail. Sara Lee has now Seibol and SAP in place, and is
about to launch 'Demantra,'
which will manage how the
company distributes trade
promotion dollars. Sara Lee
has exited volatile parts of
the portfolio, and now operates in fewer geographies.
It also has lower cost structure from Project Accelerate.
European coffee business
has proven that it can better
weather downturns now.
"The biggest step change
is the S.O.P. (Sales and Operations
Planning) process. This has yielded
savings by quickly identifying capacity constraints and reducing waste on
inventories. They think they are saving $14 million to $18 million per year
on waste alone. They have also leapfrogged the competition on outsourcing IT systems and procurement."
Mr. Moskow described management as "much more responsive to
shareholders" and said he did not
believe the company would "miss a
beat" during the medical leave taken
by c.e.o. Brenda Barnes. MBN
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - June 1, 2010

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