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JACKSONVILLE, Fla. -- Yesterday marked the beginning of a "new journey" for Winn-Dixie Stores, Inc., said president and c.e.o. Peter Lynch, as the regional retailer unveiled its proposed plan of reorganization with the U.S. Bankruptcy Court for the Middle District of Florida. With this filing, Winn-Dixie is positioned to emerge from Chapter 11 protection as soon as late October.
During a news conference yesterday morning, Lynch said the grocer will continue to focus on its current mission of "getting better all the time" by cleaning up stores, offering better customer service, and focusing on perishables. He cited these changes as the basis for driving recent identical store sales at the retailer's 527 stores in Florida, Georgia, Alabama, Mississippi, and Louisiana.
Looking ahead, Winn-Dixie aims to renovate approximately 50 stores in 2007 and open new stores in 2008, largely focusing on those same markets, Lynch said. Customers should expect what Lynch called "dramatic changes."
"The company has done a deep dive into prototype possibilities as we open new stores," he noted. "Our focus is to make comfortable locations for our customers. You will see dramatic changes in décor or the format of our stores, but we don't want to give away any more than that. We don't want to tip our hat to our competitors."
Lynch also confirmed that the retailer will step up its ethnic marketing initiatives, which got underway this year.
New financing and liquidity, as well as a minimal amount of long-term debt, should help the company work toward its goals. Winn-Dixie said it has received a commitment for up to $725 million in exit financing from Wachovia Bank. The exit financing, which will replace the company's current debtor-in-possession (DIP) credit facility on the effective date of a plan of reorganization, will increase Winn-Dixie's cash availability substantially.
Lynch noted that the proposed plan of reorganization represents the culmination of extensive negotiations with various creditors and creditor groups in Winn-Dixie's Chapter 11 cases. The retailer's so-called Creditors Committee, with Winn-Dixie's support, successfully negotiated a settlement of the substantive consolidation issue. The Creditors Committee and the company have garnered the support of ad hoc committees representing the interests of trade vendors and retirees. Winn-Dixie's plan of reorganization incorporates the substantive consolidation settlement.
Winn-Dixie said it is seeking the court's approval of the plan at a hearing scheduled for Aug. 4. The chain retain Lynch as its president and c.e.o. Once the plan is confirmed, a new nine-member board of directors will be appointed.
Current Winn-Dixie shareholders will not receive any distributions following bankruptcy emergence, and their stock will be cancelled once the plan becomes effective.
-- Jenny McTaggart