JACKSONVILLE, Fla. — Winn-Dixie Stores here last week said it plans to close 30 underperforming stores in a wide range of markets throughout its operating areas, consolidate its operating regions to three from four, and reduce its corporate workforce.
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.
“Winn-Dixie is doing the right thing,” said John Crossman, president of real estate developer Crossman & Co., Orlando, Fla. “I think in areas where Winn-Dixie is trying to go head-to-head with Publix, they are going to lose.”
Lakeland, Fla.-based Publix Super Markets, known for its high levels of service, is the No. 1 operator in Florida. Some of the stores slated for closure compete with Publix, Crossman said, while others do not.
In a filing on its website late last week, Winn-Dixie disclosed that the sites slated for closure were located across a broad swath of its territory, including two each in Georgia and Mississippi and one each in Louisiana and Alabama, with the rest in various Florida markets. Seven of the closures are in central Florida, including four in Orlando, and nine are in Broward County.
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 staff reductions 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.
“We continue to operate in a particularly difficult economic and retail environment in the Southeast,” said Peter Lynch, Winn-Dixie's chairman, president and chief executive officer, in a prepared statement. “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.”
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.
