Treasury Wines Estates to cold-store culled brands - report
Treasury Wine Estates wants to focus more on its high-end portfolio
The CEO of Treasury Wine Estates (TWE) has said he won't sell all of the wine brands pushed out in a cost-cutting cull, but will keep some back for future use, according to a report.
Michael Clarke made the paring down of TWE's portfolio a priority when he arrived at the flagging company in mid-2014 to help spearhead a turnaround. In December 2014, he said TWE could "retire" or sell some of its non-priority brands as its looks to focus on higher-end labels.
In an interview with Australia's Fairfax Media this week, however, Clarke said the trademarks for the retired brands won't be sold and will stay in TWE's archives. Clarke said the move will keep the brands out of the hands of competitors, who may rekindle sales.
In the interview, the CEO said his company, which owns more than 1,000 lines under about 100 brands, is about halfway through the product line cull. Clarke did not give details about which lines would cease, but said about 30% of TWE's current portfolio would be affected.
Since joining as CEO, Clarke has led a significant cost-cutting programme to address the company's problems, which resulted in net losses of AUD100.9m (US$93.5m) in the 2013/14 financial year. In 2014/15, TWE returned to profit, with sales also moving from red to black.
The company has recently boosted its US portfolio with the acquisition of former Diageo wine brands. Last week, Clarke said he wants to launch the brands in Asia as he looks to capture volume share in the region.
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