Sara Lee Says CEO Brenda Barnes Taking Medical Leave
Barnes, 56, will be off effective immediately, the Downers Grove, Illinois-based company said today in a statement. Jon Harris, a spokesman, declined to comment on her condition or when she would return. Marcel Smits, executive vice president and chief financial officer, will be interim CEO.
“It was a total surprise to me, and not a welcome one,” Tim Ramey, an analyst at D.A. Davidson & Co., said in a telephone interview. “That said, we like Marcel a lot. He’s been an extremely quick study at Sara Lee, and has a great understanding of where this company needs to go. I don’t think this company is at risk.” Ramey, based in Lake Oswego, Oregon, recommends buying the shares.
The office of the chairman, which will include Smits and two other executives, will oversee initiatives including the sale of Sara Lee’s international household products businesses, according to Harris.
Sara Lee has agreed to sell its body-care business to Unilever NV and its air-care business to Procter & Gamble Co. for a combined 1.59 billion euros ($1.98 billion), to focus on food and beverage products. The company has said both transactions will close this year.
Smits, 48, had served as finance chief for seven months. He joined the company in October 2009 from Dutch phone company Royal KPN NV, where he served as CFO. He previously spent 13 years at Unilever. James Crown, lead independent director, will take on role of chairman, also held by Barnes since 2005, when she took over at Sara Lee.
The third member of the office of the chairman is Christopher John, or C.J., Fraleigh, chief executive officer of North American Retail and Foodservice, which includes the Jimmy Dean, Hillshire Farms and Ball Park brands. Fraleigh will also now oversee Sara Lee’s $2.2 billion dollar bakery business in North America, Harris said.
The company named Mark Garvey, a 15-year veteran, as its interim chief financial officer.
Last week, Sara Lee said earnings for the fourth quarter, excluding some items, would amount to as much as 21 cents a share, which trailed analysts’ projections.
Ramey said that Barnes’s absence comes at a time when Sara Lee is preparing its fiscal 2011 business plan, which is usually presented to the board at the end of June.
“It’s a difficult time from that standpoint,” he said.
Sara Lee, the maker of Ball Park hot dogs and Jimmy Dean breakfast sandwiches, fell 17 cents to $14.70 in New York Stock Exchange composite trading. The stock has gained 21 percent this year.