Quaker Oats to Sell Specialty Retailing Units : Sharpens Focus on Toy, Grocery Operations
Quaker Oats Co. said Tuesday that it will divest its specialty retailing businesses, including Jos. A. Bank Clothiers, a manufacturer and retailer of traditional apparel that recently opened a store in downtown Los Angeles, as well as Brookstone, which sells hard-to-find gadgets and fine housewares.
William D. Smithburg, chairman and chief executive, said the decision “reflects Quaker’s greater focus on its U.S. grocery and Fisher-Price (toy) businesses.” The company recently announced an agreement to buy Golden Grain Macaroni Co., maker of Rice-A-Roni, and on Monday said it has acquired Richardson Foods, a maker of dessert toppings, mustards and ice cream cones sold under the name “Snoopy.”
Quaker spokesman Ronald G. Bottrell said the Chicago-based company has “received some initial expressions of interest” in the retailing chains, all of which are profitable. Jos. A. Bank Clothiers, based in Baltimore, operates 29 stores, mostly in the East. Brookstone, with offices in Peterborough, N.H., has 62 locations nationwide, including 10 in Southern California. Jos. A. Bank and Brookstone also have mail-order operations.
Sale Seen as ‘Unsurprising’
Also for sale in the retailing group is the Eyelab chain of 25 optical stores, all in the East.
John Bierbusse, an analyst with Duff & Phelps in Chicago, said the decision to sell the retailers is “unsurprising” because they “appeared destined to be a very small part of the portfolio.” The chains accounted for only about 6% of Quaker’s sales in the most recent fiscal year.
Goldman, Sachs & Co. and Salomon Bros. will handle the divestiture. The sale is expected to yield an unspecified income gain, the company said.
Separately, Quaker reported that net income for the year ended June 30 rose 15% to $179.6 million and that sales increased 4% to $3.67 billion.
Quaker’s products include hot and cold cereals, canned pet foods, Gatorade, Celeste pizza and Aunt Jemima syrup.
