SARA LEE TO SHED APPAREL INTERESTS.

Byline: Jennifer Steinhauer The New York Times

The Sara Lee Corp. announced a major revamping Monday that would include the sale of several manufacturing assets and a $3 billion repurchase of the company's common stock, the largest such transaction in its history.

The company, based in Chicago, said it would sell its textile and yarn businesses to a former Sara Lee executive, effectively shedding the manufacturing units that produce many of its apparel products. Sales of other assets valued at less than $1 billion also could be in the offing, again in the area of production, the company said. Sara Lee will take an after-tax charge of $1.6 billion in the third quarter for costs related to the sales.

Wall Street, which has been leaning on the company to improve its performance and trim away at some of its more cash-hogging units, applauded the move Monday: shares of Sara Lee rose $6, to $48.5625, on the New York Stock Exchange. An investment group led by Jack Ward, a former executive vice president of Sara Lee and consultant to the company, is the buyer.

``This is not your typical restructuring,'' said John H. Bryan, chief executive of Sara Lee, in a telephone interview Monday. ``We are not leveraging up, or selling major businesses. We are getting rid of activities that can be sourced so easily today elsewhere. It is increasingly obvious that the investment community does not like asset-intensive companies.''

Sara Lee, which sells everything from underwear and hot dogs to purses and pound cake, is following other consumer products companies like Campbell Soup Co. and H.J. Heinz Co., both of which have said they will shed assets this year. Heinz shares have risen 42 percent since September 1996, and Campbell's shares have gained 30 percent.

The move also pushes Sara Lee closer to a corporate model in which companies are divorced from making the products they sell, instead of shopping worldwide for cheap labor and resources.

``Slaughtering hogs and running knitting machines are businesses of yesterday,'' Bryan said, ``and they have low returns.''

By shedding Sara Lee's 13 yarn and textile plants, Bryan said he expects to raise $500 million and realize after-tax savings of $25 million to $50 million in fiscal 1998. Wall Street analysts said Monday that costs associated with running those plants - principally the cost of depreciation each year - helped keep the company's share price deflated.

``This is a very big positive for the company,'' said Terry Bivens, an analyst with Bear, Stearns. ``Sara Lee's stock has not done particularly well. A lot of the investors were impatient for them to announce something.''

Indeed, the gain in Sara Lee's share price between January and August, about 20 percent, was below the 26 percent gain by its peers in the food industry and the Standard & Poor's 500, which gained 29 percent during that time. Its sales grew around 5 percent in 1996, vs. the 12.6 percent gain by H.J. Heinz.