UNILEVER is spinning off its Magnum, Wall’s and Ben & Jerry’s ice cream business and wielding the axe on 7,500 jobs.
The shake-up comes as new boss Hein Schumacher tries to reinvigorate the consumer giant after years of lack-lustre performance.
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Mr Schumacher yesterday unveiled a “growth action plan” designed to save £680million over three years, largely by shedding six per cent of its 127,000 global workforce.
He is also planning to separate Unilever from its ice cream business, which last year generated £6billion of sales.
Analysts at Barclays believe the ice cream business — the biggest in the world — could be worth £14.5billion in either a stock market listing or a sale to a private equity firm.
It would be the third chunky asset dump by Unilever, which sold its Flora spreads business to private equity firm KKR in 2017 and its PG Tips tea business to another buyout firm, CVC, in 2020.
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Neither of those sales delivered a spark to Unilever’s growth, however.
The company has been criticised by investors for relying on hiking consumer prices, rather than selling more products, to boost profits.
Nelson Peltz, activist investor and father-in-law to Brooklyn Beckham, seized a seat on Unilever’s board last year and has been agitating for bolder action behind the scenes.
Yesterday his firm, Trian, said it “supports the strategic initiatives” and would continue working to “increase long-term stakeholder value”.
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Shares in Unilever, valued at £98.3billion, rose by as much as five per cent yesterday as the City welcomed the overhaul. But Hermann Soggeberg, president of Unilever’s European Works Council, called the move a “disgrace” and “unimaginative”.
He said: “The livelihoods of thousands of people are at stake in order to drive up profits.”
Miley Cyrus promoting Magnum ice cream lollies
Busin£ss analysis
ICE cream should be a simple scoop of innocent joy but bizarrely Unilever’s frozen desserts have become political firestorms.
Its Ben & Jerry’s brand has for years served up its Cookie Dough tubs with cuddly messages about making the “world a better place”.
But two years ago it announced it would no longer sell its ice cream in the West Bank because operating in occupied Palestinian territory was “counter to its values”.
The Ben & Jerry’s boycott was viewed as anti-Semitic and sparked an investors’ backlash. Unilever sold its Ben & Jerry’s licence to a local Israeli business in a messy outcome.
Meanwhile, Unilever has been added to Ukraine’s “sponsors of war” blacklist because it still sells Magnum ice creams in Russia.
The firm said leaving Russia could result in factories being seized.
Selling off ice cream might just avoid future political meltdowns.
1,000 JOBS AT RISK IN TED WOE
THE owner of Ted Baker has called in administrators, putting 1,000 jobs at risk and raising the threat of store closures.
Authentic Brands, which bought Ted Baker for £211million in 2022, blamed a fallout with the Dutch company that had been running Ted Baker’s 46 stores and online business in UK and Europe.
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John McNamara at Authentic said “damage” had been done during the fashion retailer’s partnership with AARC and too much debt had built up.
Administrators at Teneo have been appointed to Ted Baker’s holding company, No Ordinary Designer Label.
Amid rumours of a company voluntary arrangement, stores will remain open while Authentic Brands hunts for a new operating partner for the Ted Baker brand.
The administration process will give Ted Baker a breathing space from creditors, which could otherwise force a winding up order due to unpaid debts.
JAPANESE RATE RISE
JAPAN has raised interest rates for the first time since 2007, ending its status as the last country in the world to have negative rates.
The Bank of Japan said it would raise interest rates for the first time in 17 years from minus 0.1 per cent to somewhere between zero and 0.1 per cent.
Japan has been battling deflation since the 1990s and used unconventional negative interest rates to try to encourage spending and higher wages and prices.
HOME AND DIY SALES ‘WEAKEN’
SOFA retailer DFS and DIY chain Wickes have both signalled a weak consumer environment as squeezed consumers cut back on home renovations.
DFS yesterday lowered its profit guidance by £10million and said sales would be £65million below its targets as demand had “weakened significantly” since the start of the year.
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The warning came as DFS also reported pre-tax profits in the six months to Christmas had slumped to £900,000 from £30million the previous year.
Boss Tim Stacey also cautioned there could be a further £4million hit to profits due to Red Sea disruptions.
Meanwhile Wickes said sales had slipped by 0.3 per cent and orders for bathroom and kitchen installations had fallen.
Its confidence tracker suggested consumers were delaying home improvements, but its survey of tradesmen found half had projects for the next three months.
BUILDER CREST Nicholson has said it will construct 11 per cent fewer homes this year and revealed a hit of £15million from defects on past developments.
Crest said it was setting money aside for correcting defects on four sites over the next three years.
£557M IS SPENT ON DIVERSITY
THE taxpayer spends £557million a year on 10,000 public diversity and inclusion jobs but the Government has little data about the impact these roles are making.
A report concluded the Government and private employers are wasting money on equality, diversity and inclusion (EDI) efforts because they don’t measure the impact it has on the workforce.
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A report commissioned by Kemi Badenoch, Business and Trade Secretary and Minister for Women and Equalities, found that employers “want to do the right thing” but are clumsily implementing initiatives without an evidence base.
Ms Badenoch said: “We want to ensure employers are doing EDI in a way that doesn’t undermine meritocracy and aligns with our equality laws.”
