The fact that the dollar has strengthened over the last quarters hasn’t represented particularly good news for those companies who base their largest income portions from sales overseas. In fact, such a strong increase has led to significant losses for companies such as Coca-Cola, Apple, McDonalds or Procter & Gamble. The latter has announced that, as a result of the fact that some brands aren’t performing as they would expect, more than 100 brands will be cut from the company’s portfolio.
Procter & Gamble CFO Jon Moeller explains that such a step aims to improve the company’s margins and profits while also giving some excellent brands the opportunity of seeking success under a different management. However, such a move, Moeller explains, will also bring a 14 percent drop in annual sales and one of the largest cuts is Duracell, which is expected to be picked up by Berkshire Hathaway for $2.6 billion next year.
The company has already concluded several sales, among which the license for the Avril Lavigne fragrance, MDVIP (the concierge doctor service) as well as Lams. Wella, Braun, Camay and others are next on the list.
At the end of the planned brand sale, Procter & Gamble is expected to remain with at least 65 iconic brands, from Gilette and Pantene to Pamper nappies and the Tide detergent. However, what CFO Jon Moeller insisted upon was the fact that none of the brands that P&G has decided to sell is a losing one.
“We have had a lot of interest in the assets we want to dispose.” CEO A.G. Lafley said.
Mr. Lafley has been aggressively cutting costs at Procter & Gamble and decided to cut those brands that were slow-growing, as a means to increase the company’s profitability. The company’s CEO has discussed several strategic moves he is planning to make in order to ensure the growth of P&G, from turning FlexBall razors into a women’s line to turning the company’s focus towards adult incontinence products.
Image Source: We Are Development
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