SWITZ: Nestle mum over Jenny Craig sale talk

By Dean Best | 9 October 2013

Jenny Craigs largest markets are US and Australia, although has small business in France

Jenny Craig's largest markets are US and Australia, although has small business in France

Nestle has refused to be drawn on reports it is looking to offload weight management business Jenny Craig.

Reuters cited unidentified sources who claimed Nestle - which has indicated it is looking to sell off under-performing assets - had hired Goldman Sachs on a sale of the US-based division.

"As a matter of principle, we do not comment on market rumours," a Nestle spokesperson told just-food today (9 October).

Last week, Nestle said there would be some disposals from its portfolio in order to create what the world's largest food manufacturer called a "more flexible, more agile, crisp" organisation.

"Divestitures, we're going to have some. We're not going to give figures on this, as you can imagine, but there are certain things that are not - [where] we can see all the work on the strategy and all that but we cannot enjoy the business," Nestle CEO Paul Bulcke said.

He added: "We want to be in business, not in agony. If something doesn't really show it, well, we have to be sharp and say, 'Okay, fine, let's put our energy not in evading the question, but let's put the energy in getting into a solution to the problem,' and that's how it is."

Last month, Nestle was also reported to be looking to sell sports nutrition business PowerBar.

When Nestle announced its first-half results in August, the company said margins from its Nestle Nutrition business had fallen by 60 basis points, in part due to the performance of its weight management operations.

Nestle has closed its Jenny Craig operations in the UK and is shifting the focus of the business to the online channel. However, some industry watchers have claimed Jenny Craig has under-performed for around five years and Nestle faced a number of questions from analysts on the future of the business when the company published its half-year numbers.

CFO Wan Ling Martello said Jenny Craig had been "very much below our expectations" in the first half of 2013 and in 2012.  "We're restructuring the Jenny Craig centers and taking other steps to address the situation," Martello told analysts.

"The whole industry is contracting, but we're not going to hide behind that. It's clearly something we need to fix, and so we are trying different things. And I can tell you that it's not something that I'm sure by the nine-month sales forecast that you'll be able to say that we're seeing improvement."

Sectors: Health & wellness, Mergers & acquisitions

Companies: Nestle

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