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Favourite dessert brand may find new life

Sara Lee continues to trade while its administrators look for a buyer.

Sara Lee continues to trade while its administrators look for a buyer. Photo: Facebook

Family favourite dessert-maker Sara Lee may yet live on, with more than 40 interested buyers showing interest in the ailing brand.

Sara Lee, known for its frozen cheesecakes, pies and crumbles, fell into administration earlier this month – just a year after celebrating 50 years in Australia.

FTI Consulting was appointed voluntary administrator of the local Sara Lee business on October 17 with the aim of finding a buyer for the cheesecake brand.

The famous brand, which was established in 1971, is a staple in the frozen section of supermarkets, also producing ice-creams, puddings and pastries.

They are manufactured at its base in Lisarow, on the NSW central coast, where Sara Lee employs almost 200 staff. Annual sales are about $122 million, with the bulk coming from its frozen desserts.

On Thursday, FTI’s Vaughan Strawbridge said operations had continued at Lisarow while a buyer was found or the company could be recapitalised.

“Production will continue, people are still employed; importantly, we will be paying the wages on time,” Strawbridge told The Australian Financial Review.

“We didn’t have a lot of time prior to the appointment here to get our head around the business, but we know we have a good business.”

He conceded the business had faced difficulty with rising costs.

“There’s no surprise that the cost of doing business has gone up from raw materials, energy, logistics, and that’s just all the inflationary pressure,” he said.

“They have price increases that go through to customers and ultimately to end consumers, and that has resulted in reduced level of sales.”

Other complications had included the failure of Scott’s Refrigerated Logistics in February. Since then, costs of cold storage transport across Australia have risen.

A Lismore factory that produced ice-cream for Sara Lee products was destroyed in the region’s floods – leading to further costs in establishing supply and lost sals.

On the positive site, Strawbridge said demand for Sara Lee’s range was rising.

“We are running a sales process. We have had a huge amount of interest in the business,” he said.

“It’s been a good mix of local and international trade buyers, local manufacturers that own their own brands. And we’ve also got a good mix of financial investors who are interested as well.”

Sara Lee was founded by US baker-entrepreneur Charlie Lubin, who decided to name his new line of cheesecakes after his eight-year-old daughter in 1949.

The brand in Australia is owned by New Zealand investor group South Island Office, which acquired it business from McCain Foods in 2021. In turn, McCain had acquired it from Hillshire Brands Co in 2013 for $85 million.

Only the Australian arm is affected by the administration.

A first creditors’ meeting was to be held on Friday.

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