JACKSONVILLE, Fla. — Winn-Dixie Stores here on Tuesday said it plans to close 30 underperforming stores, consolidate its operating regions to three from four, and reduce its corporate workforce.
“We continue to operate in a particularly difficult economic and retail environment in the Southeast. To respond to these business and economic conditions, we have thoroughly reviewed our retail operations and support structure and have decided to exit certain retail locations and reduce our corporate and field support staffs," said Peter Lynch, Winn-Dixie's chairman, president and chief executive officer, in a prepared statement.
In addition to the store-level cuts, the company will eliminate approximately 120 corporate positions at its headquarters and in the field, which it said it expects to drive annualized savings in the range of $12 million to $17 million. The store closures and position eliminations are expected to be completed by the end of the first quarter of fiscal 2011, which ends on Sept. 22 of this year. Winn-Dixie currently operates 514 stores.
None of the stores slated for closure had been remodeled as part of the company's latest remodeling initiative, which has so far touched "nearly half" the chain's stores.
In connection with the closures and staff cuts, Winn-Dixie also expects to incur charges in the range of $35 million to $50 million in the first quarter of fiscal 2011.
The company also reaffirmed that it expects to report fiscal 2010 adjusted EBITDA at the low end of its guidance range of $140 million to $160 million, as previously announced. It is schedule to report fiscal 2010 results on Aug. 31.
