Prepared Foods July 6, 2004 enewsletter

Sara Lee Bakery Group, a division of Sara Lee, said it will close two bread bakeries in Texas and eliminate 306 jobs as part of its move to end private-label and restaurant production in the Dallas, Houston and San Antonio areas.

The company will stop production at its Houston bread bakery on September 18 and then sell the assets to Thomasville, Ga.-based Flowers Foods for an undisclosed amount. According to a company release, the sale of the Houston assets will help to offset restructuring costs. Its San Antonio bread bakery will close December 31. Bread and bun production from those bakeries will be transferred to the company's Dallas bakery.

The company said it is ceasing production at the facilities to concentrate on branded, higher-margin bread items. As a result of the closures, 187 jobs in Houston and 119 in San Antonio will be eliminated, the company said.

Sara Lee bakeries in Lubbock and Harlingen, Texas, will continue to serve private-label and restaurant customers, noted the company.

"Private-label and restaurant customers continue to be important to our business across the country, even though the return on investment and assets in these areas of Texas does not justify remaining in this segment of the bread business," Richard Noll, the CEO of Sara Lee Bakery Group, said in a statement. "We do not follow a one-size-fits-all business model. Every market and region has its own unique competitive dynamics. In other parts of the country where we are able to make an adequate return, private-label and restaurant products will remain an important part of our business portfolio."

The company will also reduce the number of routes, distribution centers and retail thrift stores in Dallas, San Antonio and Houston to serve local customers with branded products.