Sara Lee sold off 40% of its business — and still couldn't survive as one company

Sara Lee was a sprawling American consumer-goods conglomerate that owned everything from cheesecake and hot dogs to shoe polish and insecticides. At its peak in the 1990s, its portfolio spanned food, beverage, household products, and branded apparel across dozens of countries. By 2004, the conglomerate structure had become a liability: the brands were too diverse to manage coherently, and the stock had underperformed for years.

In February 2005, new CEO Brenda Barnes announced a multi-year plan to divest roughly 40% of revenue and refocus on food, beverage, and household care. Over six years, Sara Lee sold European meats and apparel, spun off Hanesbrands, sold direct-selling to Tupperware, disposed of body-care to Unilever for €1.275 billion, Ambi Pur to P&G for €320 million, Kiwi shoe-care to SC Johnson for €245 million, and North American Fresh Bakery to Grupo Bimbo for $959 million. The divestments raised over $3.7 billion.

Yet the transformation never produced the focused company management had promised. In January 2011, Sara Lee announced a split into Hillshire Brands (North American meat and frozen foods) and D.E Master Blenders 1753 (international coffee and tea). The split completed on July 4, 2012. Two years later, Hillshire Brands was acquired by Tyson Foods. D.E Master Blenders was absorbed into JAB Holding's coffee empire. The Sara Lee brand was eventually sold to private equity. The conglomerate built over 70 years was dismantled in seven.