World's largest maker

of consumer products

to refocus sales efforts

Procter & Gamble, the world's largest manufacturer of consumer products, has decided to cut up to 100 brands from its arsenal in a move that will allow the company to focus more on a core group of lucrative staples like Tide, Gillette and Gain.

The outgoing brands comprise less than 10 percent of the company's revenue, according to the company's chief executive officer, A.G. Lafley, who announced the move on a call with analysts to discuss the firm's fourth-quarter results Friday.

The cuts come as Procter & Gamble has faced pressure from one of its largest investors, hedge fund manager William Ackman, to shed some of its brands and carry out other cost-saving measures. Lafley replaced Robert A. McDonald, who was ousted by the board under pressure from Ackman.

In April, Lafley agreed to sell the company's Iams and Eukanuba pet food brands to the candymaker Mars for $2.9 billion. Procter & Gamble acquired the brands in 1999 for $2.3 billion, but experienced slow growth in the unit in recent years.

The planned divestitures put more of a focus on developing spinoff products from Tide, Gillette, and about 70 other brands that have made up almost all of the company's profits in recent years, Lafley said.

"This new streamlined P&G should continue to grow faster and more sustainably, and reliably create more value," he said. "Importantly, this will be a much simpler, much less complex company of leading brands that's easier to manage and operate."

Lafley said the company planned to "harvest, partner, discontinue or divest" between 90 to 100 brands, although he did not specify which ones. The group's aggregate sales have declined 3 percent a year over the past three years, he said, while profits have dipped 16 percent.

Procter & Gamble has been focusing on some of its core products to try and bolster sales.

Taking cues from the success of single-use dishwasher detergents, for example, Procter & Gamble has been pushing the same idea with Tide Pods, individually wrapped doses of detergent.

On Friday, the company reported that overall sales fell 1 percent to $20 billion in the quarter that ended June 30, while profits fell 2 percent to $9.5 billion. Core earnings per share rose 20 percent to 95 cents.

Shares of Procter & Gamble rose nearly 4 percent by late morning.

Analysts have expressed skepticism that the company's other lines of businesses can keep up. Sales of beauty products dropped 2 percent in the fourth quarter as brands like Pantene, Olay and Herbal Essences have struggled.

"It's not just by chance that P&G's beauty business has underperformed for such a long period of time," said Nik Modi, an analyst with RBC Capital Marks. "Maybe they just don't have what it takes to be in the beauty business."