By George Anderson
It was really never a question of if but when Winn-Dixie would seek to reorganize under Chapter 11 bankruptcy protection.
Now that the question has been answered -- Winn-Dixie Stores filed yesterday evening in the U.S. Bankruptcy Court for the Southern District of New York -- the next question is, what will happen next?
According to a release posted on the Winn-Dixie Web site, the company has not shut any of its 920 currently operating stores in the Southeast and the Bahamas and, as far as shoppers are concerned, it will continue to be business as usual.
The chain has secured $800 million in debtor-in-possession (DIP) financing from Wachovia Bank to help it with its cash flow needs during the reorganization period.
Peter Lynch, president and chief executive officer of Winn-Dixie, said in a released statement: "We intend to use this reorganization process to take the actions necessary to position Winn-Dixie for future success. This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores. We deeply regret any adverse impact the Chapter 11 filing may have on our associates, vendors, shareholders and business partners."
Among its immediate plans, Winn-Dixie intends to seek the termination of leases it holds for 150 store locations and two warehouses the chain had previously closed. It also plans to sell-off all non-core assets such as any manufacturing plants it owns.
Mr. Lynch said the company intends to "focus on increasing sales quickly and cost-effectively across the chain by improving the execution of merchandising and sales-focused initiatives, reinvigorating the company's store associates, and restoring a sales-driven culture across the organization."
Winn-Dixie intends to achieve this by enhancing its "perishables offerings and other product merchandising, as well as implementing store sales competitions and other initiatives to motivate associates to drive sales," said Mr. Lynch.
Moderator's Comment: What will happen with Winn-Dixie now that it has filed for reorganization under Chapter 11? If it were up to you to decide, what would the Winn-Dixie reorganization and survival plan look like? - George Anderson - Moderator