Southeastern said it is “…implementing a court-supervised, pre-packaged” debt restructuring agreement after “conducting a thorough review of options for reducing our current debt”. The company expects to reduce current outstanding debt by approximately $500 million.
In addition to Winn-Dixie, Southeastern Grocers also operates stores under the brand identities of BI-LO, Fresca y Mas and Harvey Supermarket with a total of 582 grocery outlets across the South. The bankruptcy announcement also included news that ninety-four (94) Southeastern stores, thirty-five under the Winn-Dixie brand, will be closed in Alabama, Georgia, Florida, North Carolina, South Carolina, Louisiana and Mississippi.
Thirty-five (35) of the Winn-Dixie closures will be in Florida, with Tampa having six of the 35 (5 Winn-Dixie and one Harvey’s) according to a report in the March 15th edition of the Tampa Bay Times. The Tampa Bay Winn-Dixie closures include: 2525 North Dale Mabry Highway,4317 Gandy Boulevard, 2525 East Hillsborough Avenue (a Harvey’s Supermarket), 6180 U.S. 41 Apollo Beach, 7625 Blind Pass Road, St. Pete Beach (Pinellas County) and 2126 Collier Parkway, Land O’Lakes (Pasco County).
The current bankruptcy case will not be the first for Southeastern Grocers – it has filed for bankruptcy protection several times since 2005. The company has also had many store closures and employee layoffs during that same period. Southeastern CEO Andrew Hucker said “The agreement we announced today is an important step in Southeastern Grocers’ transformation to put our company in the best position to succeed in the extremely competitive retail market in which we do business.” It was unclear, as of Friday (March 16th) what the closure timetable will be. The company statement added that it “…hopes to work through this process as quickly and as efficiently as possible within the next ninety days…”.
The Winn-Dixie grocery store chain is headquartered in Jacksonville, FL. The company traces its history back to 1925, when it began operating as a one-store grocery under the name of Rockmoor Grocery. In 1927, the founder, William Davis (and his four sons) renamed his fledgling enterprise Table Supply and began acquiring additional properties under that name. Over the years between 1927 and 1939 the company grew slowly with new acquisitions and store openings in Florida. In 1939, Davis’s surviving sons purchased a 51% interest in a growing chain of seventy-three stores named Winn-Lovett (which it merged under that name with its existing Table Supply chain). In the decade that followed its 1939 move, the Davis family purchased two additional regional grocery store chains – the Steiden Stores chain of 31 stores in Kentucky and the Margaret Ann Stores chain with 46 stores in Florida.
In 1952, Winn-Lovett went public, becoming the first Florida-based industrial corporation to be listed on the New York Stock Exchange. Acquisitions continued in the four following decades, with growth as follows:
- 1955: Penney Stores (Mississippi), Ballentine Stores and Eden Stores (South Carolina) and Dixie Home (117 stores, with a change of name for all brands to Winn-Dixie)
- 1956: Ketner-Milner Stores (North Carolina), Hill Stores (Louisiana and Mississippi) and King Stores (Georgia)
- 1967: City Markets (the Bahamas)
- 1976: Buddies Supermarkets (Texas, Oklahoma and New Mexico)
- 1995: Thriftway Food Drug (Ohio)
- 2000: Jitney Jungle
The Winn-Dixie chain has experienced financial difficulties since early in the present century. At the end of its 2002 fiscal year, Winn-Dixie closed all of its 76 stores in Texas and Oklahoma. In April, 2004, the company closed a total of 156 stores, including all one-hundred eleven of its stores operating in the Midwest and 20 stores run under the Thriftway name in Ohio. Additionally, 2004 saw the company convert forty Atlanta, GA area stores to its Save Rite Grocery Warehouse logo in order to avertstore closures in that area.
In 2005, fiscal disaster struck the regional chain when it filed for bankruptcy that resulted in so many store closures that the company had fewer operating stores in that year than it had during the 1950’s. When it came out of Chapter 11 bankruptcy in early 2006, Winn-Dixie had ceased all operations in the states of Tennessee, Texas, Virginia, North Carolina and South Carolina, closing a total of 326 stores in those four states. The reorganization plan provided for the company to operate in only five deep South states – Alabama, Florida, Georgia, Louisiana and Mississippi.
The prospective reorganization plan announced Friday by Winn-Dixie’s parent is the latest bad news to hit the chain of grocery stores since the 2005 reorganization bankruptcy. Insiders and industry analysts say the Chapter 11 plan includes:
- All outstanding secured debt (including Secured Notes and a 2014 Revolving Credit Facility) will be paid in full
- Utilization of 100% committed “exit financing” via a six-year senior secured loan ($525 million) and an Asset-Based Lending (“ABL”) revolving credit facility
- Cancellation of unsecured notes in exchange for 100% equity in the post-bankruptcy company
- General unsecured claims holders (includes suppliers, contract partners and trade creditors) to be paid 100% in the ordinary course of business going forward
- Southeastern Grocers will receive a 5-year warrant subject to dilution over time as consideration for its equity
- Continuing operations of 582 Southeastern Grocery-branded stores (and closure, as reported here, of 94 stores across seven southern states)
As of this writing, Winn-Dixie and associated brands employs over 40,000 associates in its grocery, liquor, and in-store pharmacy operations.
This is a developing story that will be updated in the coming days and weeks…
Photo credit: Wikipedia