Winn-Dixie Files for Reorganization
Winn-Dixie Stores and 23 of its U.S. subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The filings were made in the evening of February 21 in the U.S. Bankruptcy Court for the Southern District of New York.
All 920 Winn-Dixie stores in eight states and the Bahamas are open and serving customers. Winn-Dixie intends to use the reorganization process to take additional action to improve its operations and financial performance and strengthen its business.
Peter Lynch, President and CEO of Winn-Dixie, said, “We intend to use this reorganization process to take the actions necessary to position Winn-Dixie for future success. This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores. We deeply regret any adverse impact the Chapter 11 filing may have on our associates, vendors, shareholders and business partners. However, having spent the last two months taking an in-depth look at the Company and visiting over 50 stores across our chain, I am convinced that the Chapter 11 process will give us the opportunity we need to restructure our finances, strengthen our business performance and achieve a sustained turnaround at Winn-Dixie.”
To fund its continuing operations during the restructuring, Winn-Dixie has secured an $800 million debtor-in-possession (DIP) financing facility from Wachovia Bank, N.A. Subject to court approval, the DIP credit facility, which replaces the Company’s previous $600 million credit line, will be used to supplement the Company’s cash flow during the reorganization process.
Mr. Lynch continued, “We will focus on increasing sales quickly and cost- effectively across the chain by improving the execution of merchandising and sales-focused initiatives, reinvigorating the Company’s store associates, and restoring a sales-driven culture across the organization. These plans include enhancing Winn-Dixie’s perishables offerings and other product merchandising, as well as implementing store sales competitions and other initiatives to motivate associates to drive sales.”
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