Winn-Dixie to sell or close about 326 stores
Winn-Dixie to sell or close about 326 stores
JACKSONVILLE, FL -- Winn-Dixie Stores Inc. announced June 21 what it termed a series of actions intended to enhance the company's financial performance and position it for profitability in the long term.
The cornerstone of the company's plan consists of focusing on its strongest markets, where it typically has a significant market share position, and reducing its store "footprint" from 913 stores in the United States and the Bahamas to 587 stores.
"Creating a smaller but more profitable store base will best position Winn-Dixie for long-term financial health and a successful future, Peter Lynch, president and chief executive officer of Winn-Dixie, said in a statement. "We will be focusing our resources on markets where Winn-Dixie has a strong presence and there are compelling opportunities. This will allow us to build on our strengths and take advantage of the considerable potential we see to improve the shopping experience for our customers. Already we have made significant strides. The steps announced today will help us to continue our progress as we strive to make Winn-Dixie a stronger company, better able to compete in the marketplace with a strong foundation for the future.
As a result of the actions announced, Winn-Dixie expects that its workforce will be reduced by approximately 28 percent, or 22,000 positions. Where practicable, the company will seek to offer affected associates positions at other Winn-Dixie operations. In addition, the company is reviewing its corporate organization and plans to make reductions in headquarters and support personnel reflecting the smaller store footprint that the company will operate. An announcement regarding a corporate restructuring is expected to be forthcoming later this summer.
Winn-Dixie currently operates 901 stores in nine states and 12 in the Bahamas. These stores are located in 37 Designated Market Areas. Once the footprint plan is implemented, Winn-Dixie will operate approximately 587 stores in 23 DMAs in Florida, Alabama, Louisiana, Georgia, Mississippi and the Bahamas. Of the 326 stores that the company will sell or close, 233 stores are in DMAs the company is leaving entirely. The other 93 stores are located in DMAs in which Winn-Dixie will remain, but these particular stores do not meet the company's financial requirements going forward.
Winn-Dixie's anticipated annual revenue following these store dispositions will be approximately $7.5 billion, compared to approximately $10 billion today. In connection with the new store footprint, Winn-Dixie is also making changes in its distribution and manufacturing plant operations. Specifically, the company will be exiting three of its 10 distribution centers. These facilities are located in Atlanta; Charlotte, NC; and Greenville, SC.
The company will also close the portion of the Montgomery, AL, distribution center that handles dry grocery. The perishables portion of the Montgomery distribution center will remain open, and the company will be expanding the use of the Hammond, LA, dry grocery facility to accommodate the dry grocery items now handled in the Montgomery facility.
In determining its future store footprint, Winn-Dixie conducted a thorough analysis of its store base, including stores' market share, cash flow, profitability, real estate quality and financial outlook. In the 14 DMAs it is exiting, the company has either had a difficult market position, unsatisfactory financial performance and limited opportunities for profitable sales growth, or it has determined that the stores in a particular DMA are too distant from its continuing distribution facilities to be operated on a cost-effective basis.
The DMAs that Winn-Dixie is exiting are the marketing areas of Alexandria, LA; Atlanta; Augusta, GA; Charleston, SC; Charlotte, NC; Chattanooga, TN; Columbia, SC; Columbus-Tupelo, MS; Greensboro-High Point, NC; Greenville-Spartanburg, SC; Huntsville, AL; Jackson, MS; Raleigh-Durham, NC; and Savannah, GA. (The geographical area included in a DMA often covers more than one state; therefore, the name of the DMA usually reflects more than just the city represented by the DMA name.)
The cornerstone of the company's plan consists of focusing on its strongest markets, where it typically has a significant market share position, and reducing its store "footprint" from 913 stores in the United States and the Bahamas to 587 stores.
"Creating a smaller but more profitable store base will best position Winn-Dixie for long-term financial health and a successful future, Peter Lynch, president and chief executive officer of Winn-Dixie, said in a statement. "We will be focusing our resources on markets where Winn-Dixie has a strong presence and there are compelling opportunities. This will allow us to build on our strengths and take advantage of the considerable potential we see to improve the shopping experience for our customers. Already we have made significant strides. The steps announced today will help us to continue our progress as we strive to make Winn-Dixie a stronger company, better able to compete in the marketplace with a strong foundation for the future.
As a result of the actions announced, Winn-Dixie expects that its workforce will be reduced by approximately 28 percent, or 22,000 positions. Where practicable, the company will seek to offer affected associates positions at other Winn-Dixie operations. In addition, the company is reviewing its corporate organization and plans to make reductions in headquarters and support personnel reflecting the smaller store footprint that the company will operate. An announcement regarding a corporate restructuring is expected to be forthcoming later this summer.
Winn-Dixie currently operates 901 stores in nine states and 12 in the Bahamas. These stores are located in 37 Designated Market Areas. Once the footprint plan is implemented, Winn-Dixie will operate approximately 587 stores in 23 DMAs in Florida, Alabama, Louisiana, Georgia, Mississippi and the Bahamas. Of the 326 stores that the company will sell or close, 233 stores are in DMAs the company is leaving entirely. The other 93 stores are located in DMAs in which Winn-Dixie will remain, but these particular stores do not meet the company's financial requirements going forward.
Winn-Dixie's anticipated annual revenue following these store dispositions will be approximately $7.5 billion, compared to approximately $10 billion today. In connection with the new store footprint, Winn-Dixie is also making changes in its distribution and manufacturing plant operations. Specifically, the company will be exiting three of its 10 distribution centers. These facilities are located in Atlanta; Charlotte, NC; and Greenville, SC.
The company will also close the portion of the Montgomery, AL, distribution center that handles dry grocery. The perishables portion of the Montgomery distribution center will remain open, and the company will be expanding the use of the Hammond, LA, dry grocery facility to accommodate the dry grocery items now handled in the Montgomery facility.
In determining its future store footprint, Winn-Dixie conducted a thorough analysis of its store base, including stores' market share, cash flow, profitability, real estate quality and financial outlook. In the 14 DMAs it is exiting, the company has either had a difficult market position, unsatisfactory financial performance and limited opportunities for profitable sales growth, or it has determined that the stores in a particular DMA are too distant from its continuing distribution facilities to be operated on a cost-effective basis.
The DMAs that Winn-Dixie is exiting are the marketing areas of Alexandria, LA; Atlanta; Augusta, GA; Charleston, SC; Charlotte, NC; Chattanooga, TN; Columbia, SC; Columbus-Tupelo, MS; Greensboro-High Point, NC; Greenville-Spartanburg, SC; Huntsville, AL; Jackson, MS; Raleigh-Durham, NC; and Savannah, GA. (The geographical area included in a DMA often covers more than one state; therefore, the name of the DMA usually reflects more than just the city represented by the DMA name.)
