JACKSONVILLE, FL-A US Bankruptcy Court has approved Winn-Dixie's reorganization plans to emerge from bankruptcy, according to statement released by the grocer. Winn-Dixie management now expects to emerge from its Chapter 11 status within the next 30 days.
The locally based supermarket chain has received $725 million in exit financing commitments from a consortium of banks led by Wachovia. The funds will allow the company to make "investments in its current store base, to develop new stores, and to take other actions to position the business to compete effectively in its markets over the next several years," according to a company statement.
Over the last few years, the 522-store chain has had its store base decrease dramatically. At the time of its filing in February 2005, the company operated 920 units. The chain also exited the Bahamas, the Carolinas, Tennessee and Virginia and now has stores in Florida, Alabama, Louisiana, Georgia, and Mississippi.
In its latest quarterly report, filed with the SEC late last month, Winn-Dixie reported a net loss of $24.6 million for the period ended Sept. 20, an improvement from the $552.6-million hit it had taken during the same year-ago period. Same-store sales rose by 5.1% during the period, and net sales came in at $1.6 billion, a gain of 2.4%.
Winn-Dixie field for bankruptcy after losing market share to discounters like Wal-Mart, as well as other grocery-store chains. That problem has not entirely gone away, according to its quarterly report. "We believe that competition remains a key factor that negatively affects our identical store sales, particularly on the opening of a new competitor store," it says.
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