Sara Lee shares fell 10 cents to $14.74 at 9:52am in New York trading this morning (9 August) on news that chairman and CEO Brenda Barnes is to step down from her role permanently.

The 56-year-old, who has led a vast restructuring of Sara Lee over the past six years, resigned in order to focus on improving her health after suffering a stroke in May this year.

The successor to Barnes however, now faces the task of completing a sweeping restructuring launched by the CEO on her appointment in 2005, and the uphill struggle to revive sales that have either stagnated or fallen for six straight quarters.

The firm has already initiated steps to choose a new CEO, looking at both internal and external candidates, and in the meantime, Marcel Smits will continue as interim CEO and Mark Garvey as interim CFO.

James Crown, an independent director, will remain chairman of the board, a role he assumed when Barnes’ leave of absence began.

“The new chief may pursue purchases, using proceeds from asset sales, to keep up Barnes’s efforts to fuel revenue from packaged foods,” Peter Jankovskis, co-chief investment officer at Oakbrook Investments told Bloomberg.

“Barnes had started the process of paring down the company to focus on foods, but it is going to take time,” Jankovskis added. “Once they’ve sold enough assets, perhaps they’ll make an acquisition. That seems to be the right strategy.”

Smits, who has held top financial positions at companies around the world, is considered a key contender for the role.

Having spent 13 years at Unilever, Smit left to join Sara Lee in October last year as CFO before taking over Barnes’ duties in May.

As CFO and interim CEO, the 48-year-old executive has pushed Sara Lee to become more transparent about its financial performance and has also gone some way to helping turn around many analysts’ perception that Sara Lee “was a dead company going nowhere,” Timothy Ramey, an analyst with DA Davidson & Co. told the Wall Street Journal.

However, before Smits arrived, Christopher Fraleigh, chief of the company’s North American Retail business, was considered the likely eventual successor. Fraleigh, along with Barnes, worked at PepsiCo in the 1990s.

Since joining Sara Lee in 2005 he has held positions of increasing responsibility and is still viewed as a likely candidate for the role.

Yet whoever the board chooses as Barnes’ successor, the move raises questions about how any change at the helm will affect Sara Lee’s strategy long term.

Under Barnes, the company has sold various businesses, including its body-care business to Unilever and its air-freshener unit to Procter & Gamble Co. for a combined EUR1.59bn (US$2.1bn), and transformed itself into a more focused food and beverage company.

Indeed, once a hodgepodge of apparel, food and household brands, the company has shed more than 40% of its business over the past five years under Barnes’ tenure as she looked to cut costs and streamline the business.

Indeed, last month, the company was also reportedly considering the sale of its North American bakery division, which could be worth US$1.5bn. The division is said to be the firm’s “Achilles heel”, with margins below the rest of the group despite having operations nationwide.

And any new chief executive will face heavy promotions at the grocery store level and weak consumer spending on food in the US and Europe along with revived competition from private-labels.

Additionally, Sara Lee’s US and Western European bread business has struggled of late.

BMO Capital analyst Kenneth Zaslow wrote in a research note last week that he could no longer rule out the possibility of a break-up of the company. Still, that possibility is a small one, Zaslow cautioned, noting that there was a greater probability that Sara Lee will remain in its existing state.

Sara Lee insists that it will conduct a thorough process to identify a CEO successor in “a timely manner”.

But while the firm says it will consider both external and internal candidates, at the present time it seems this may be just a two horse race.