Playtex Is Icing on Sara Lee’s Expansion : Diversification: The baking firm has years of experience in intimate wear. The latest plan could make it the nation’s largest women’s apparel maker.

Sara Lee Corp., founded on a fruitcake named after the owner’s infant daughter, is increasingly becoming known as a dominant merchandiser of underwear.

The company’s experience in intimate wear dates back a dozen years or more, but its recent decision to buy Playtex Apparel Inc. would make Sara Lee--best known for baked goods--the nation’s largest maker of women’s apparel.

Sara Lee already owns such apparel lines as Hanes and L’Eggs hosiery, while the addition of Stamford, Conn.-based Playtex would give it such products as Cross Your Heart bras. The deal would not include Playtex’s family products unit that sells tampons and hair-care items.

To finance its stronger move into personal products, Sara Lee sold its over-the-counter drug business in Europe for $821 million. Meanwhile, it bought Pretty Polly Ltd., England’s leading hosiery concern. Likewise in Australia, where it acquired the country’s largest textile and apparel company, the Linter Textiles Corp. Ltd. In Spain, it was the Sans Group, the leading underwear manufacturer; in Finland, the Suomen Trikoo Oy hosiery company.

And Sara Lee has a minority position in Vatter GmbH, Germany’s largest hosiery company.

“We’re attempting to put together the leading position in each” product line “and in each world marketplace where we choose to participate,” Sara Lee spokesman E. Ronald Culp said.

Not that Sara Lee has forgotten its beginnings.

In the company’s fiscal year that ended June 29, $7 billion of its $12.4 billion in total revenue was from food sales, continuing a tradition that began in 1947 when Charles W. Lubin started packaging baked goods in a back room of one of his three small Chicago bakeries. At his wife’s suggestion, Lubin named his fruitcake after their young daughter, Sara Lee.

Personal products account for one-third of total sales. But with the proposed addition of Playtex, Sara Lee would increase its personal products sales by about 12%.

Sara Lee announced Aug. 8 that it agreed to buy Playtex for $171.5 million and to refinance about $400 million of Playtex debt. Playtex Apparel had sales of $480 million last year.

The strong move into apparel, plus a resurgence in the previously stagnant food business, hasn’t been lost on the stock market. Over the past year, Sara Lee common stock has increased about 86%, from $24.12 to $44.875 at Monday’s close.

“I’m very high on the company,” said Ronald Morrow, an analyst in New York with the brokerage firm Smith Barney, Harris Upham & Co. “It’s one of my primary recommendations.”

He said that a year ago, the stock was unreasonably low, principally because financial analysts had been focusing on the flat food sales.

“They were not very appreciative of the apparel business” and slow to recognize the turnaround in food sales, Morrow said Friday.

Food sales improved by 4% in fiscal 1991 after Sara Lee closed an aging bakery, put a greater emphasis on higher profit-margin items and made administrative changes.

A year ago, the company presented its Free & Light bakery line. The line features foods that are cholesterol free, 95% to 100% fat free and with one-third fewer calories than the company’s conventional products, said Joe Kiely, a senior vice president for bakery goods.

“In two to five years, we expect this category to represent 25% of the line, which is consistent with the rest of the food industry,” he said.

“In the longer term, that segment of the business is just going to continue to grow as the baby boomers continue to age and be concerned about a healthier lifestyle.”

The prospects for growing profits on intimate apparel also appear promising, analysts say.

Bras, underwear, hosiery and the like are less likely than outer wear to suffer the vagaries of fashion, giving intimate garments greater consistency.