P&G Dumps More Slow-Growing Retail Brands

Consumer-product giant Procter & Gamble keeps emptying its shelves of well-known but unwanted brands.

The latest to go is the Noxzema skin care line which was sold this week to Alberto-Culver, a suburban Chicago-based hair and skin care company. Alberto is acquiring Noxzema's rights and trademarks in the United States, Canada and part of Latin America.

More spin-offs are expected as P&G's Chairman and CEO A.G. Lafley prunes his portfolio of venerable brands that have tumbled off the growth track. Lafley, who last year reportedly hired investment house Blackstone Group to explore spin-offs, is looking to put its money behind products with greater global sales potential and higher margins. Lafley describes these brands as P&G's "core business."

That line-up includes its Crest dental care products, which is fighting with rival Colgate-Palmolive for a greater slice of the expanding international oral care market, and Gillette, which has expanded its Fusion razor into Europe. Earlier this year, Cincinnati-based P&G bought New York-based Frédéric Fekkai, which includes high-end hair care products and salons, for an undisclosed amount.

Meanwhile, Wall Street analysts are predict new homes for some of P&G's lesser lights, including Pringles chips and Duracell, the battery line which was acquired in 2005 as part of P&G's $57 billion acquisition of Boston-based Gillette.

And as recession-minded consumers limit their spending, P&G is also looking to cut back on expensive advertising and marketing support of second-tier brands as it slices up to 10 percent of its estimated $3.5 billion U.S. ad budget. Higher commodity and energy costs are also hurting margins, which is forcing P&G to offset those increases through further cost savings and price increases, according to the company, which does not comment on possible product line sales.

Details of the Noxema sale were not disclosed. Earlier this year, P&G sold Folger's coffee to J.M. Smucker & Co. for $3.3 billion, while a few years prior P&G sold its Jif peanut butter lines to Smucker.