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JACKSONVILLE, FL-Bankrupt grocer Winn-Dixie has reached a preliminary agreement to sell 79 of its units for $38.7 million to up to 20 entities made up of national supermarkets and smaller companies. The winning bidders for the properties will continue to operate them as supermarkets, Winn-Dixies officials say.

The sale is subject to higher offers the grocer could receive at an auction on July 18 and 19. Units that are part of the sale are in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee. “We are working hard to find buyers for additional stores who will continue to operate them as well as offer employment opportunities for our associates,” says Peter Lynch, Winn-Dixie’s president and CEO, in a statement.

The transaction comes after the grocer, which operates stores in the Southeast and the Bahamas, announced last month that it is closing 326 units, leaving it with 587 stores. The retailer, hurt by competition from Wal-Mart and other grocery chains, filed for bankruptcy protection in February.

Winn-Dixie is keeping its presence in some areas of Alabama, Florida, Georgia, Louisiana, Mississippi and the Bahamas. The company is altogether exiting both Carolinas, Tennessee and Virginia, as well as northern parts of Alabama, Georgia and Mississippi. The retailer will also close some stores in Louisiana.

The company is also shutting three of its 10 distribution centers and will market its manufacturing plants. After the closures, company executives expect annual revenues to drop from their current $10 billion to $7.5 billion.

As a result of this restructuring, Winn-Dixie will reduce its workforce by 28%, or 22,000 employees. During its Q2, the company’s most recently completed quarter reported in February, the grocer posted a net loss of $399.7 million compared to $79.5 million for the same period in fiscal 2004. Same-store sales during the quarter dropped 4.9% from the same year-ago period.

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