Brown-Forman ‘aims to sell’ Southern Comfort

US spirits maker Brown-Forman, which produces brands like Jack Daniel’s whiskey, is looking to sell its Southern Comfort and Chambord labels, according to reports.

Southern Comfort suffered a 4% drop in sales in the latest quarter (Photo: Brown Forman)

The Kentucky-based company wants to offload non-essential assets to focus on its core whiskey brands like Woodford Reserve, Old Forester, and Jack Daniel’s, sources told the Reuters news service.

Brown-Forman has brought in Goldman Sachs to explore the possibility of selling off brands, with Southern Comfort and Chambord mentioned specifically.

Southern Comfort is estimated to be worth around $700 million (£460m), according to market analysis firm Nomura.

Moves have already been made to sound out potential buyers, the anonymous sources close to the matter said.

The possible sale is being viewed positively by the market, with experts saying that Southern Comfort has been holding back the good standing of the rest of the Brown-Forman portfolio.

“Given the drag the brand has been on performance in recent years and its non-core nature, we view a sale as strategically sound and should help support underlying sales growth trends in the future,” RBC Capital Markets told investors.

the drinks business has contacted Brown-Forman for comment.

Southern Comfort and its extensions experienced a 4% decline in sales in the first quarter of the 2015/16 financial year. Its sales have declined nearly 16% since 2011.

Meanwhile, Jack Daniel’s brands grew its sales by 6% in Q1 2016. Sales of Jack Daniel’s Tennessee Honey grew by 18%.