CANADA: Cott Corp. confirms refocus, rejigs board
Cott Corporation has confirmed its intention to refocus solely on private label beverages, while also appointing a new chairman.
The Canada-based soft drinks company, which earlier this year posted a Q1 loss of US$12.1m compared to an operating profit of $15.5m a year earlier, said today (19 June) that the move followed a period of "significant challenges".
The actions will include combining some executive positions, which will result in the departure of the president of the North American business unit and the chief people officer. The company also said that it will eliminate positions throughout the organisation, including not filling certain executive vacancies. The company estimates that total severance costs will be between US$6m and$8m. The total annual savings, including headcount reductions and manufacturing and supply chain optimisation, is anticipated to be between $39m-$43m, although the company did not give specific numbers for the move.
"Our role is not to invent new categories," said Cott's interim CEO, David Gibbons. "Our role is to be 'fast followers' to leverage the growth of expanding categories and to improve profitability for our retail partners at lower prices to consumers."
The company said it has already refocused its marketing efforts on the needs and requests of its retailer partners. "This will be our focus," Gibbons continues. "Our existing retail partners will drive our new product development."
"Too much energy and resources" had been diverted away from Cott's core retailer customers and toward branded initiatives over the last 18 months, the company said. "We will change course," said Gibbons. "Through these efforts we will continue to reposition Cott to play a greater role as a champion of private label."
In announcing a new chairman, Cott confirmed that it had come to an agreement with private equity group Crescendo Partners, who acquired an 8.7% stake in April. Under the agreement, Cott's board will be expanded from ten to 11 directors. Four new directors, including Crescendo's president and CEO, Eric Rosenfeld, will join the board, with Rosenfeld becoming lead independent director. Frank Weise, Don Watt, and Serge Gouin have resigned from the board to facilitate the board changes, with Gibbons becoming board chairman. The CEO search committee will be reconstituted to consist of four directors including Gibbons and Rosenfeld. "The committee will assist the board in evaluating and identifying potential candidates for the CEO position," Cott said.
Jones Soda has reported a net loss of US$5.3m for the third quarter, as the economic downturn bites the US soft drinks sector....
Cott Corporation has seen impairment charges in its third quarter hammer its net profit deeper into the red....
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