Winn-Dixie seeks reorganization

Published 12:00 am Thursday, March 3, 2005


Managing Editor

LAPLACE – The Winn-Dixie chain of supermarkets voluntarily filed for Chapter 11 bankruptcy last week, but this action will have no effect on the operation of local stores or employment, a corporate spokesperson said.

Wendi Kopsick, speaking for the Jacksonville, Fla.-based chain, pointed out the chain of 920 Winn-Dixie stores in eight states, including four in the River Parishes, will not be affected.

A voluntary Chapter 11 filing is an action taken by a company to resolve financial challenges. During the Chapter 11 process, a company still continues to conduct business while reorganizing its finances and operations in order to maximize the value of its assets for the benefit of its creditors – those to whom it owes money. Companies in Chapter 11 continue to pay their associates’ salaries and provide benefits. They are also generally able to continue to do business with vendors and customers as usual. A company exits Chapter 11 when the Bankruptcy Court has approved a reorganization plan and the transactions and payments outlined are completed. The plan is usually developed by a company in conjunction with its creditors.

The Customer Reward Cards are still being honored, as usual, and all other customer programs and policies, including coupons, gift cards and refunds, remain as always, she continued.

As part of the corporation’s financial reorganization, each store will be evaluated and leased properties will be

(See Bankrupt, Page 5A)

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reviewed “with the objective of achieving a rationalized store ‘footprint’ that allows the Company to operate profitably and increase cash flow and return on invested capital,” according to a press release issued recently.

In addition, Winn-Dixie is seeking to immediately terminate the leases of two warehouses and some 150 stores that were closed previously. This will generate a cash savings of about $60 million.

In LaPlace’s Riverlands Shopping Center, the former Winn-Dixie site has already been released several years ago, said St. John Parish Economic Development Director Julia Remondet.

The owners of the old Winn-Dixie site, General Growth Inc., have been rehabilitating the shopping center and “it’s looking great,” Remondet said. However, the company is still looking for a grocer to move into the former site.

Kopsick declined to mention any competition by name, but acknowledged that such competition, leading to a revenue decrease and reduction of their credit rating, led to the Chapter 11 filing.

“It’s too early to speculate on how long it will take” for Winn-Dixie to come out of Chapter 11, Kopsick continued. “We intend to use the Chapter 11 process to create a more focused and financially stronger company,” according to the corporate website,

Remondet responded, “I have every confidence that this action by Winn-Dixie will work out in their best interests.”