P&G sharpens focus on personal care and household by exiting pet care

The deal will see Spectrum take over the IAMS and Eukanuba brands in Europe for an undisclosed sum, leaving the company to concentrate on more profitable areas of the business, which has consistently proved to be the beauty and personal care in recent years.

This will include a total of 42 markets throughout the European region, accounting for approximately 10% of total sales in the category and the deal is expected to close before the end of 2015, subject to regulatory approval.

P&G sold 80% of its stake in the pet care business, which included the Latin American and North American operations, back in April to the Mars company for an estimated $2.9 billion back in April of this year.

Exiting pet care should improve margins​

The earlier deal also included the Russian and Turkey markets, with the later sale of another 10% stake to Mars that including the Japan, Australasia and South Africa pet care businesses.

“Exiting Pet Care is an important step in our strategy to focus P&G’s portfolio on the core businesses where we can create the most value for consumers and shareowners,” said​ P&G’s Chairman, President and Chief Executive Officer, A.G. Lafley.

The move to exit the pet care segment is part of the company’s overall drive to focus on more profitable parts of the business as sales and profits have continued to slide in the face of stiff competition and an overstretched business portfolio.

A tough financial year for P&G​

Back in August the company revealed that its net sales slipped 1% in the fourth and final quarter of the year, capping off a challenging year that stressed the need for a major brand portfolio shake up.

Net sales for the quarter ending in June came in at $20.16bn, compared to $20.30bn in the same quarter last year, results that show a steady deterioration in the company revenue performance for each quarter in the fiscal 2013/2014 year.

Full year sales were up 1%, from $82.58bn, to $83.06bn, a figure that represented an increase of 3% in terms of organic sales, and what that also underlined the challenge the company has had to overcome with respect to currency translations throughout the year.

Speaking at a conference to announce the results, Lafley stated that the company would be focusing on a huge brand portfolio overhaul that could see the number of brands ultimately reduced by half.