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Brenda Barnes – Sara Lee (SLE)


At 53, Brenda Barnes is back and in full swing. Ten years ago, her 1997 resignation as Head of Pepsico’s North American Beverage business to spend more time with her family caused a huge debate at the time for women in business. Many felt Brenda had let down their gender by opting out of the executive office. Some speculated she left to protest her husband Randy Barnes’ stalled career as Senior VP and Treasurer at Pepsico. Brenda insisted the resignation was about parenthood.

Nevertheless, when Brenda left, it caused women in executive ranks around the US to take notice, but most just went about life as usual. As did Brenda. Within two years, she was back acting as interim chief operating officer of Starwood Hotels and Resorts. She also sat on seven corporate boards of directors, and continued her influence on boards during her so-called hiatus.

Barnes was one of seven daughters in a blue collar family where her mother died of cancer and her father, a maintenance worker for International Harvester, died from complications of diabetes. She graduated in 1975 with a Bachelor of Arts degree in Economics from Augustana College. Brenda went on to obtain her MBA from Loyola University Chicago in 1978. She was awarded an Honorary Doctor of Humane Letters from Augustana in 1997. Once her 3 children Jeff, Brian and Erin were in high school and college, Brenda returned her focus to full time work taking the job of President at Sara Lee in 2004.

Company Overview
Sara Lee Corp. CEO Brenda Barnes is hunting for acquisitions, and Interstate Bakeries Corp., the maker of Wonder, as well as Hostess cupcakes and Twinkies could be a fix for her sagging bread business.

Ms. Barnes proved she can cut costs, sell underperforming businesses and begin the recovery of an ailing food and consumer products maker. But after 2½ years, she has yet to produce the blockbuster products investors expected from the former PepsiCo Inc. marketing whiz. New Jimmy Dean breakfast sandwiches, wheat bread that tastes like white bread and European air fresheners haven’t satisfied shareholders’ craving for faster sales growth.

Current Season
Excluding divested lines such as Hanes, Sara Lee’s sales rose 7% to $12.3 billion in its fiscal year ended June 30. Net income was $504 million, or 68 cents a share. For fiscal 2008, the company has projected profit as high as $1.01 a share. Its operating profit margin was 7%, well short of Ms. Barnes’ long-term goal of 12%. New products will play a key role in reaching profit goals.

“Where is the growth going to come from?” asks Gregg Warren, an analyst in Chicago with Morningstar Inc. “That is an awful lot of new products.”

Sales of new Jimmy Dean breakfast sandwiches and skillets helped the frozen breakfast category rise 30% in the last three months. J. P. Morgan Securities Inc. estimates the category accounts for 5% of Sara Lee’s U.S. retail sales, which were $4.6 billion in 2007. Sara Lee hasn’t been very good at innovating in the last 10 years, but Ms. Barnes has made it a higher priority for the company, says Ken Harris, a managing director with Evanston consultancy Cannondale Associates.

“It takes about two years to get the innovation pipeline robust, and it’s appropriate now to expect them to provide a glimpse into new products,” Mr. Harris says.

Recent News
In recent news, Sara Lee announced that Peggy M. Foran would become executive vice president, general counsel and corporate secretary. Foran had previously been with Pfizer. Barnes commented, “She is recognized worldwide as a true leader with a reputation for the highest levels of personal integrity.”

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