Treasury Wine Estates’ new chief executive Michael Clarke says he plans to improve the winemaker’s ailing US business but has not ruled out options that include selling the assets, which includes US wine group Beringer.
Investors responded well to the news, sending TWE shares 4.85% higher to $3.785 at 1.07pm (AEST), against a benchmark index fall of 0.19%. TWE shares earlier lifted as high as $3.92.
Clarke, who took up his new job last week, told analysts in a briefing that he was not emotionally attached to any part of the business, including the struggling US operations.
Clarke was hired to turn around TWE, which posted a 38% slump in first-half operating earnings due to rising costs after a series of profit warnings. The company dumped its previous CEO David Dearie in September over mismanagement of US inventories.
“If there are brands or businesses that can be nurtured into a stronger position, then I will nurture those,” Clarke said, who returned from visiting the US business 10 days ago.
He said he was running the US operations as a “going concern”, with plans to improve marketing in premium and masstige brands and improve the quality of some of the commercial brands.
“I do feel this is a business that can improve and can get better. But at the same time I will look at all the options,” Clarke said, adding he had examined all of the options raised by analysts in their research reports. “Everything is on the table.”
Treasury Wine, which was spun off from brewer Foster’s Group three years ago, has made writedowns of about $3 billion in recent years on its investment in California’s Beringer vineyards, bought at the peak of the previous cycle in 2000.