Winn Dixie pulls out of Texas and Oklahoma
May 6, 2002 12:00 PM
Citing "continued losses and reduction of market share," Winn Dixie today announced it is pulling out of Texas and Oklahoma and closing its distribution and dairy plant in Fort Worth.
President and CEO Al Rowland said the company wants to focus on its more profitable core markets.
The Jacksonville, Fla.-based grocery chain - which has responded to tough competition by converting many of its Winn Dixie brand stores to the SaveRite warehouse format -- will exit 71 stores in Texas and five in Oklahoma. The company said it is in final negotiations to sell the dairy plant and the majority of the stores to various buyers.
Stores to be sold will be notified as individual agreements are reached, Winn Dixie said, noting that it will close units it fails to sell. The company said 5,300 people will lose their jobs and that employees who work through the closures will receive severance.
The transactions, which Winn Dixie predicts will result in a one-time charge of about $75 million, are expected to close by the end of the company's fiscal year June 26. The sale of the properties and inventory should generate about $90 million, which will be used to pay down debt and/or reinvest elsewhere, Winn Dixie announced.
The transactions should decrease future annual sales by about $630 million per year, but boost annual net earnings by about $31 million or $0.22 per diluted share, the company predicted.
Winn-Dixie is one of the nation's largest retail food chains, operating more than 1,000 stores in the Sunbelt.
-- Staff and wire reports
