Dial Cleans Up Portfolio By Shedding Specialty Personal Care Division
This article was originally published in The Rose Sheet
Executive Summary
Dial is selling its Specialty Personal Care division, comprising the Sarah Michaels and Freeman Cosmetic personal care brands, to the Chicago-based Hathi Group, the firm announced Aug. 28.
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Dial is selling its Specialty Personal Care division, comprising the Sarah Michaels and Freeman Cosmetic personal care brands, to the Chicago-based Hathi Group, the firm announced Aug. 28. "With the sale of SPC, we have jettisoned our most troubled business and will now be able to better focus on growing our core brands and lowering our operating costs and interest expense," the firm said. The transaction will provide Dial with a tax write-off of approximately $200 mil. after tax, the Scottsdale, Ariz. firm said. Dial previously said it was looking to write off $180 mil.-$200 mil. from the sale of the division. The Hathi Group, an operator of packaging, medical equipment and personal care product companies, owns Kirk's Natural Products, which markets Kirk's Castile Soap. Hathi acquired the brand from Procter & Gamble in 1996. In addition to soaps, Kirk's also markets shampoo, conditioner and skin and body care products. The sale of Freeman Cosmetic and Sarah Michaels is in line with Dial's strategy to organize its portfolio while seeking a buyer for the company. Dial's board of directors recently placed the company up for sale after determining that it would be difficult to keep it operating independently (1 (Also see "Dial Seeks Buyer Following Turnaround Effort" - HBW Insight, 6 Aug, 2001.)). CEO Herbert Baum announced in January that a pending sale of the SPC business had moved into the intermediate stage (2 (Also see "Dial Specialty Personal Care Sale In Intermediate Stage - CEO Baum" - HBW Insight, 29 Jan, 2001.)). The division has generated steady declines since the fourth quarter 1999. The company did implement several turnaround efforts within the division, including an increase in product initiatives and discontinuation of the Nature's Accent line. However, second quarter 2001 sales for the SPC group declined further, down 38.3% to $11.3 mil. (3 (Also see "Dial Complete Revamp Will Include New Packaging, Merchandising Programs" - HBW Insight, 30 Jul, 2001.)). Dial purchased the Freeman Cosmetic brand in June 1998 and acquired the Sarah Michaels bath and body line the following August for a combined total of $280 mil. |