American manufacturer of consumer products, Procter & Gamble, will focus on 70 to 80 core brands, with the remainder sold off or shut down.
Core brands deliver 95 % of profit
Procter & Gamble currently has brands like Ariel, Bonus, Dash, Lenor, Mr. Proper, Swiffer, Head & Shoulders, Pampers, Tampax, Tide, Always, Gilette and Vicks.
Its core brands already create 90 % of the turnover and 95 % of the company's profit. With only 5 to 10 % for the other brands, they only represent a small number within the company.
Company becomes less complex
It is unclear which brands will have to be shut down or sold: "The goal is to keep the brands important to the consumer", CEO A.G. Laffley. Big brands in branches that do not weigh heavy on the company's bottom line may still leave the company, like it has already sold off a majority of its animal food branch.
The restructuring should be finalized in one or two years' time and it should help the company to become simpler to manage.
Modest turnover growth in new fiscal year
Procter & Gamble managed a 83.062 billion dollar (62 billion euro) turnover in its past fiscal year, which ended on 31 June 2014. Its operational profit was 15.288 billion euro (11.4 billion euro).
For its current fiscal year, it expects a low, one-single digit % turnover increase.