Sara Lee Corp. (SLE) on Thursday said it would spin off or sell businesses representing 40 percent of its revenue and promoted President Brenda Barnes (search) to chief executive as it tries to jump-start sluggish profits.

Shares of Sara Lee, which is known for its baked goods, rose 6.7 percent. It said the businesses it plans to exit -- apparel, European meats, direct selling, and regional coffee -- have total revenue of $8.2 billion.

"Today, Sara Lee is embarking on an aggressive, strategic plan that will transform the entire enterprise into a tightly focused food, beverage and household products company," Barnes said in a news release.

Barnes succeeds Steve McMillan, 59, who will remain chairman through October. Barnes, 51, a former executive with PepsiCo Inc. (PEP), had been hired in 2004 to eventually replace McMillan.

The restructuring had been telegraphed by management last month when the company reported second-quarter earnings, though the scope caught some analysts by surprise.

"What is left is a more manageable and higher margin company," John McMillin, analyst at Prudential Equity Group, said in a research note.

A.G. Edwards analyst Christopher Growe called the management change "a very bold move, adding, "I was also surprised by the extent to the divestitures."

Sara Lee, which had said it was seeking a buyer for its European apparel business, said it plans to spin off the rest of its apparel business -- which includes Hanes underwear (search), Playtex bras and Champion sportswear -- into a separate publicly traded company that would have revenue of about $4.5 billion.

The company also said it plans to sell its $1.1 billion European meats business, its $450 million direct selling business and its $300 million regional coffee business, which includes the Chock full o'Nuts and Hills Bros. brands.

The company said its goal is to have an operating margin of higher than 12 percent in 2010 from the current 8 percent.

Sara Lee shares were up $1.54 at $24.51 on the New York Stock Exchange (search).

"My only concern is that the new company appears to be focused on some fairly slow-growth categories," Growe said. "While they have a strong position in those categories, the growth potential of the new Sara Lee would appear to be below that of the overall food group."

Growe rates Sara Lee a "hold."

McMillin said the remaining company's tax rate of between 29 percent and 31 percent "...may limit near-term value creation." He rates Sara Lee "neutral."

Sara Lee said it expects to take several hundred million dollars in charges and write-downs over the next several years as part of the overhaul, including $250 million for job cuts and recruitment.

The company plans to write off part of the $327 million book value of its North American bakery brands as it focuses on its larger brands. Another $240 million is expected to be spent to overhaul technology systems and $220 million will be spent on plant closings.

Sara Lee said it hopes to reap annual cost savings of $575 million to $800 million. About $250 million of the savings is expected to be invested in marketing and research and development costs.

It said the restructuring is not expected to affect earnings for the current fiscal year, which ends July 2. Sara Lee stood by its third-quarter profit outlook of 29 cents to 34 cents a share and full-year outlook of $1.46 to $1.56, including any gains and charges.

The company also plans to streamline its structure into three reporting units and centralize its North American business and corporate staff in the Chicago area and its international staff in Utrecht, The Netherlands.

The three reporting units will be North American Retail, with $4.5 billion in revenue; North American Food Service, with $2.2 billion in revenue; and Sara Lee International, with $4.6 billion in revenue.