Sara Lee Isn't Exactly Cooking

As most Chicagoans brave the cold, snowy winter, Cornelis Boonstra suddenly has plans to spend a lot of time in the Bahamas. After just six months as the globe-trotting president of consumer-products giant Sara Lee Corp., Boonstra abruptly resigned on New Year's Eve. In an interview with BUSINESS WEEK, he declared himself "extremely tired after very heavy travel" through 20 years of helping build Sara Lee's European business--and since July, leading restructurings in Europe and the U.S. Now, with his Caribbean home beckoning, the 56-year-old native of the Netherlands says: "I feel my job is done."

Yet the suddenness of Boonstra's departure, only two months after he proudly addressed Sara Lee's annual meeting as its "first non-American president," stunned insiders and outsiders alike. Perhaps it shouldn't have. There is little doubt the job wore Boonstra down. But his exit may have been hastened by the management upheaval forced by his tough cost- and job-cutting.

Early on--even before Boonstra moved to Chicago--there were questions among some board members about how, as the No.2 executive, his direct, sometimes impatient management style would mesh with the more genteel approach of his predecessor, Paul Fulton, and of longtime Chairman and Chief Executive John H. Bryan. (Bryan declined to comment for this story.) More recently, says one source close to the board, there was some "restiveness in the [management] ranks."

LEANER TIMES. You might say. Since Boonstra's appointment, at least eight senior executives have left the company. Among them: M. Weldon Schenck, a senior vice-president who headed European personal products, and William P. Carmichael, another senior vice-president and controller. Some insiders and outsiders blame Bryan for allowing the tension to spread. "Hundreds of years of management experience have been taken out of a successful company," gripes one former senior European executive.

Boonstra also helped cut 10% of the 330 jobs at the Chicago headquarters. He oversaw a management restructuring at the big Winston-Salem (N.C.) Worldwide Personal Products Div. headquarters, as well as the closure of two hosiery plants. And he installed a new management team in the Paris personal-products operation. So his departure could help restore calm among scores of managers fearful for their jobs.

But if the messenger is gone, his message still resonates: Sara Lee needs to hunker down for leaner times, especially in such core businesses as its Hanes and L'eggs hosiery businesses. And after a furious three-year, $1.7 billion acquisition spree, adding such well-known brands as Brylcreem, Mark Cross leather goods, and Playtex bras and lingerie, there's clearly a need to revamp the structure. "Boonstra was known as a tough cost-cutter, and that's why we liked him on Wall Street," says analyst Nomi Ghez of Goldman, Sachs & Co.

Indeed, most former Sara Lee executives applaud Boonstra's strategy to drive down costs and decentralize management. For his part, Boonstra insists, "there was no misunderstanding between Mr. Bryan and myself" on strategy. A source close to Bryan also says there was no falling-out over strategy.

EMPTY OFFICE. That may be because Sara Lee shows signs of needing a jolt. Ghez figures the company's earnings will rise just 8.4% this year, to $763 million, on sales of $15.6 billion, up 6.8%--not bad in a consumer-goods industry hit by fading brand loyalty but far below Sara Lee's five-year average of 16.7%. The chief problem is the $6.1 billion personal-products unit--now the company's largest--where Europe's recession and a shift away from many of its hosiery lines is driving down profits after years of growth.

Sara Lee insiders and former executives wonder how the company will manage the transition to a period when growth will be much harder to come by. With Boonstra gone, the president's post will be left open, at least for now. Chief operating responsibilities will be split between 58-year-old Donald J. Franceschini, a tough outsider who came to Sara Lee with its 1991 Playtex acquisition and uill now oversee all personal products, and C. Steven McMillan, a 48-year-old veteran who will run all meat, coffee, and household-products operations.

But the tone, say insiders and outsiders, must be set by the 57-year-old Bryan--and soon. He comes under criticism from many for being too detached from daily operations. "This is an embarrassment to the chairman," says one senior executive in Winston-Salem. "He has got to take steps to calm the organization down." Most believe he will--and that a company rich in brands and in management depth eventually can recover. But it's also clear that Bryan has some way to go to re-create the entrepreneurial culture he believes is vital. Too many executives still are uncertain of their future.

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