Winn-Dixie Has Buyers for 79 of Its Stores

Jul. 2–Winn-Dixie Stores Inc. has found buyers for 79 stores it’s closing, but on Friday said it plans to begin going-out-of-business sales for all 326 stores on a previously announced hit list on Aug. 1.

Winn-Dixie, which leases virtually all its stores, would get $38-million from 20 buyers, an average of $490,000 for each store. Some stores in some small towns in Mississippi and Alabama are fetching as little as $120,000.

None of the stores identified Friday in a not-yet-complete U.S Bankruptcy Court auction are in the Tampa Bay area. Only four of the stores with buyers are among the 44 Winn-Dixies planned to close in Florida.

The chain has said it will close 11 of the 55 Winn-Dixie stores in the Tampa Bay area and one of its two SaveRite warehouse-style supermarkets in Tampa. Going-out-of-business sales would begin in early August with a goal of having them closed by mid September, said Winn-Dixie spokesman Pat McSweeney.

While Winn-Dixie is asking bidders to hire its employees in hopes buyers will keep the stores open under a different name and ownership, the Jacksonville company plans to pay severance to as many as 22,500 employees who will lose their jobs in the downsizing.

Forced into a Chapter 11 bankruptcy filing by anxious suppliers in February, Winn-Dixie plans to pull out of 14 markets across the Southeast to survive as a much smaller company. Closing the 326 stores would leave Winn-Dixie with 587 stores, mostly in the Deep South and Florida, and annual revenues of about $7.5-billion, down from $10.6-billion in 2004. That’s about half as many stores as the chain had five years ago.

The chain has been hobbled by a variety of problems, many of them self-inflicted, ranging from its image to internal inefficiencies that keep it from competing on price with Wal-Mart Supercenters. An attempt to upgrade its offering to something more like rival Publix Super Markets in the 1990s ended with five straight years of decreased earnings despite a multibillion dollar investment in new and bigger stores.

Bids for the closing stores can be submitted until the auction, which runs July 18-19.

U.S. Bankruptcy Judge Jerry Funk is scheduled to approve the winners in the auction in hearings that begin July 27.

Then an auction begins for the leftover stores, without the inventory. That auction is designed for bidders interested in turning the stores into something else.

The larger buyers identified in the first round are Harris Teeter, which bid $10-million for nine stores in the Carolinas. C&S/Bi-Lo is offering $9-million for 20 stores in Alabama, South Carolina and Mississippi. SuperValu Inc., a Minneapolis wholesaler that operates supermarkets under several names including Save-A-Lot in Florida, bid $9.5-million for 37 Winn-Dixies scattered across the Southeast.

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