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Unilever pares portfolio
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September 21, 1999: 12:14 p.m. ET
Consumer goods maker axes 1,200 brands as it tightens core focus
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LONDON (CNNfn) - Anglo-Dutch consumer goods maker Unilever disclosed plans Tuesday to drop 1,200 brands from its product portfolio as it seeks to boost margins and cut costs across core product lines ranging from tea, culinary and hair products to skin creams and deodorants.
The streamlining at one of the world's largest packaged goods companies aims to reduce the drag from the 5 percent of Unilever business company executives deem "non-strategic".
Unilever, with $45 billion in sales last year, makes a range of food, detergent and household and personal products including Lever Brothers soap powder, Lipton tea, Wall's ice cream and Elizabeth Arden cosmetics.
The slimmed-down portfolio of 400 brands -- each number one or two in its market or segment -- will consist of several "powerbrands" with global market reach, the company said.
"By focusing on fewer leading powerbrands, which we aim to grow at 6 to 8 percent (per year), we will progressively drive up overall rates of growth over the next three to five years," Unilever's co-chairmen, Niall Fitzgerald and Antony Burgmans, said.
The company expects to improve operating margins by half a percentage point per year over the next five years.
The company predicted that the portfolio paring will result in greater efficiencies in its supply chain. The overhaul is part of a broader restructuring under which Unilever has narrowed its focus on three core sectors -- home care, personal care and food -- while disposing of underperforming businesses.
The company said operating margins already have risen to 11 percent and net margins are nearing 8 percent.
The portfolio disposals will be managed over the medium term in order to limit any downside to revenue, the company said. 
-- from staff and wire reports
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Unilever
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