Procter
& Gamble has decided to sell or terminate up to 100 of its subsidiary
brands in order to reduce costs, and focus on brands that generate the most
sales.
The
multinational consumer goods company is still to decide which brands it will
keep and which ones it will ditch, but more than half of its current brands
will be shed, mostly minor brands that have annual sales of less than US$100
million each.
P&G CEO
Alan Lafley said fewer of its household, female and baby care brands will be
cut, compared with its four other major areas.
The company
has not revealed its business plan for developing the remaining brands, but it
is certain that the brands that will be kept are leading brands in their own
fields, and which remain popular with shoppers.
Liang Yu,
an executive with P&G's Greater China, said P&G currently owns more
than 20 brands in China and the Chinese market is still seen to have growth
potential.
A senior
employee said however that the P&G he knows would be reluctant to cull its
brands, as the move would hurt the company's stability in the finance and
commerce markets. He further noted that the reduction would also mean at least
half of the company's workforce would be let go.
P&G
will reportedly focus on the 70 to 80 brands that contribute up to 90% of the
company's total sales.
Some 23 of
P&G's leading brands, including Pampers, each generate sales of between
US$1 billion and $10 billion a year.
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