Winn-Dixie Abandoning Texas, Oklahoma Markets, Emptying 78 Locations

Continued losses and reduction of market share forced the grocer's decision, according to a company statement. The plan is to focus solely on the Southeast US.

Winn-Dixie says it's in final negotiations to sell the daily plant and the majority of the stores. Some cherry-picking admittedly will result as the grocer attempts to reach agreements before the deadline. The best guess around town is that Dallas-based Fleming Cos. Inc. might be sizing up some locations to roll out its new member of the family, Rainbow Foods. Still, there's no telling in today's market just how many stores will find takers before doors are locked--the plan for any locations not reserved by June 26. There are 54 stores situated in North Texas.

The grocer employs about 5,300 workers, who are being outfitted with severance. Winn-Dixie estimates it will take a one-time hit of about $75 million after tax or 53 cents per diluted share in the market exits. In the long-term, the grocer's future annual sales will drop $630 million, but positively impact net earnings by about $31 million per year. About $90 million is expected to be collected from property sales and inventory liquidation. Final market exit costs, though, are still being fine-tuned.

In a prepared statement, Al Rowland, Winn-Dixie's president and CEO, says the mass exit "will allow us to focus our management talent and capital in our core markets where we get a higher return for our shareholders.