Bankrupt retailer Winn-Dixie Stores has announced that it has reached preliminary agreement to sell 79 stores to purchasers who intend to continue operating their locations as food and beverage stores.
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These stores are part of the 326 locations that the company previously announced it intends to sell or close in conjunction with its new ‘store footprint’ strategy. On 21 June 2005, Winn-Dixie reported that it was taking action to strengthen its performance and achieve long-term profitability by focusing on its strongest markets and reducing the size of its store base from 913 stores in the US and the Bahamas to 587 stores.
In motions filed with the Bankruptcy Court, Winn-Dixie is seeking authorization to sell a total of 79 stores to 20 potential buyers, all of whom intend to operate these stores on an ongoing basis. These agreements are preliminary and subject to higher and better offers that may be received at an auction to be held 18-19 July 2005. Agreements include a provision related to hiring Winn-Dixie Associates.
The company noted that its marketing effort is ongoing and that it is continuing to work to identify potential buyers particularly for those stores for which there is currently no sale agreement.
The aggregate purchase price in the preliminary agreements for leases and equipment at the 79 stores is approximately $38.7m. This amount does not include inventory to be purchased and is subject to change due to the outcome of the auction. Winn-Dixie is also seeking court authorization to conduct store-closing sales at locations that it is unable to sell at the auction as food and beverage stores. Subject to court approval, the company anticipates that these sales would begin on or about 1 August, 2005 and be completed in early to mid-September.
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By GlobalDataThe court is expected to rule on these motions at a hearing scheduled for 27-29 July 2005.
“To date, we have sales agreements for 79 stores,” said Peter Lynch, president and CEO of Winn-Dixie. “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. We sincerely regret the impact that our plans will have on many of our associates who will not be offered opportunities with new owners. We recognize this is a difficult time, and we will provide severance and other assistance to these individuals through their transition.”
