Newspaper article The Florida Times Union

Winn-Dixie to Cut Stores, 10,000 Jobs; Restructuring Plan Has Grocery Chain Pulling out of 16 'Non-Core' Markets

Newspaper article The Florida Times Union

Winn-Dixie to Cut Stores, 10,000 Jobs; Restructuring Plan Has Grocery Chain Pulling out of 16 'Non-Core' Markets

Article excerpt

Byline: Mark Basch, The Times-Union

In a move to turn around the company, Winn-Dixie Stores plans to cut 10,000 jobs and close or sell 156 of its 1,078 supermarkets, the company president announced Friday.

Winn-Dixie, the largest company based in Jacksonville and the 162nd ranked Fortune 500 company, said the cutbacks are part of its ongoing plan to improve operations for the long term.

The company will also close or sell some of its manufacturing facilities and distribution centers over the next 12 months, although none of those facilities are in Jacksonville, President and Chief Executive Officer Frank Lazaran said.

"There's not anybody today receiving a pink slip," he said.

Winn-Dixie will close 45 stores in its core markets, including three of its more than 400 Florida stores. But Lazaran would not identify specific stores because he hopes to sell, rather than close, those stores. "Our plan is to sell as many of those stores as ongoing business concerns as we can," he said. That would allow employees to keep their jobs with the new owner. Employees at closed stores and facilities will be given the opportunity to transfer to other Winn-Dixie facilities.

Lazaran, who took over as CEO last June, announced a major overhaul of Winn-Dixie's operations in January after reporting a loss of $79.5 million for the second quarter of its fiscal year. The company Friday announced a small profit of $610,000 for the third quarter ended March 31 with total sales falling 5.5 percent to $2.7 billion. But Lazaran said in an interview Friday that he is optimistic about the turnaround plan.

"I feel good about the progress Winn-Dixie has made. We have a long way to go but we did make a lot of progress in the quarter," he said.

The restructuring includes an image makeover program and a new brand position plan. The company said it would test a new brand-positioning concept in one of its markets in July, but Lazaran wouldn't specify the market.

In a conference call with analysts Friday, Lazaran said Winn-Dixie's market analysis over the last three months showed that the company needs to improve its image.

"In too many locations, our customers view Winn-Dixie as a convenience store where they can take advantage of specific discounts, as opposed to where they do the bulk of their shopping," he said.

He said one key component of the store makeover plan is offering an improved selection of perishable items.

Winn-Dixie said Friday it has identified 36 core market areas in Florida, Georgia, Alabama, Louisiana, the Bahamas and parts of North Carolina, South Carolina, Mississippi and Tennessee. The company will operate 922 stores in those markets after shedding 45.

The other 111 stores that will be sold or closed are in 16 non-core markets that Winn-Dixie will exit entirely. Those markets include Cincinnati, Louisville, Ky., Memphis, Tenn., and Nashville, Tenn.

The core markets are areas in which Winn-Dixie is one of the top three supermarkets or has an opportunity to become a market leader. …

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