SRL Sara Lee Corp

RNS No 8924f
SARA LEE CORPORATION
15th September 1997


Contact

Jeffrey Smith              Leigh Ferst
312/558-8727 (Media)       312/558-8464 (Analysts)


                    SARA LEE CORPORATION ANNOUNCES MAJOR
                     $1.6 BILLION RESTRUCTURING PROGRAM

        Company to generate $3 billion by de-verticalizing operations;
               also plans to sell businesses, reduce costs and
                   repurchase $3 billion in common stock

CHICAGO (September 15, 1997) -- Sara Lee Corporation announced today that it is
considering the adoption of a three-year strategic program to more tightly
focus its business activity and make the corporation more competitive. The
program is designed to improve the company's financial returns and its sales and
earnings growth rates, thereby increasing shareholder value.

The key element of this program is a plan to de-verticalize the operations of
the corporation to the extent practical and possible. The company is targeting
to raise $3 billion in cash over the next three years through the divestment of
operating assets and further cost reduction programs, including outsourcing.
In addition, certain business units may be sold. With these proceeds, Sara Lee
intends to significantly accelerate the repurchase of its common stock, spending
at least $3 billion over the next three years to re-acquire its stock in the
open market.

"This restructuring program is aimed at fundamentally reshaping Sara Lee
Corporation for the future," said John H. Bryan, chairman and chief executive
officer. "While Sara Lee is currently operating at record levels by every
measure of financial performance, we always seek to further improve results and
enhance shareholder value."

Mr. Bryan went on to say, "The business of Sara Lee Corporation has been and
will continue to be the building of branded leadership positions. The size and
strength of these positions today, coupled with rapidly advancing globilization
and specialization in our marketplace, lead us to deverticalize our operations.
This program will significantly reduce the capital demands on our company,
enhance our competitiveness and let us focus even more sharply on our mission of
building brands."

For the program's first phase, Sara Lee is in discussions to divest
substantially all of the company's U.S. yarn and textile operations related to
knit products. Total cash flow benefits to Sara Lee from this transaction are
expected to approximate $500 million over the next three years. The divestiture
of those assets will allow Sara Lee to reduce its manufacturing presence while
increasing its focus on the more profitable business of building and marketing
its leading brands. Profits, margins and returns are expected to improve through
lower fixed expenses and reduced operating costs. Top-line growth will benefit
from savings achieved through restructuring and cost reduction efforts that will
be targeted toward investment spending behind brand building and marketing
initiatives.

Other assets, relating both to Sara Lee's food and non-food businesses, are
expected to be included in subsequent transactions over the next three years.

Sare Lee's management is also considering the divestiture of certain businesses
with revenues of less than $1 billion. While the sale of these business units
would increase the focus of Sara Lee's remaining operations, no business unit
will be sold unless Sara Lee receives an economically attractive valuation.

The three-year strategic program will result in a fiscal 1998 after-tax charge,
which is currently estimated to be approximately $1.6 billion, related primarily
to the sale and write-down of assets that the company has determined it does not
need to own in order to fulfill its primary mission of building brands on a
global basis. The company anticipates that the charge will be predominantly
non-cash. The size and composition of the write-off have not yet been fully
determined, although this process is expected to be completed by the end of the
company's third fiscal quarter.

After-tax savings from the restructuring program and cost reduction efforts are
estimated to be $25 million to $50 million in fiscal 1998, rising to $100
million to $125 million by the year 2000. While the company projects a higher
earnings growth rate as a result of these savings, a significant percentage of
the additional funds will be used to increase sales through enhanced investment
spending and marketing programs.

Lastly, in connection with the restructuring, Sara Lee plans to repurchase at
least $3 billion in Sara Lee common stock in the open market over the next three
years. This stock buyback activity would represent the most aggressive share
repurchase plan in the company's history.

Sara Lee Corporation, a global food and consumer products company with $19.7
billion in sales, markets a wide variety of products under leading brand names,
including Sara Lee, Ball Park, Hillshire Farm, Jimmy Dean, Aoste, Douwe
Egberts, Hanes, Hanes Her Way, L'eggs, Bali, Playtex, Champion, Coach, Dim,
Sanex and Kiwi.

END

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