2005 News Releases
Investors:
(212) 521-4835
Media:
1-866-449-8608
NOTE: The list of stores for which bids have been received, are available at
WINN-DIXIE REACHES PRELIMINARY AGREEMENT
TO SELL 79 STORES TO FOOD AND BEVERAGE OPERATORS
Files Motions Seeking Court Authorization
To Implement New Store Footprint Strategy
JACKSONVILLE, FL, July 1, 2005 – Winn-Dixie Stores, Inc. (“WNDXQ”) today announced that it has reached preliminary agreement to sell 79 stores to purchasers who intend to continue operating these locations as food and beverage stores. 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 June 21, 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 U.S. and the Bahamas to 587 stores.
In motions filed with the Bankruptcy Court today, 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 July 18-19, 2005. Agreements include a provision related to hiring Winn-Dixie Associates. A list of the 79 stores for which the Company has entered into sales agreements is available at www.winn-dixie.com.
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. Parties interested in purchasing these stores should contact Ramesh Chakrapani with The Blackstone Group at 212-583-5066, Matthew Morris with The Food Partners at 202-579-0434, or Emilio Amendola with DJM Asset Management at 631-752-1100.
The aggregate purchase price in the preliminary agreements for leases and equipment at the 79 stores is approximately $38.7 million. 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 August 1, 2005 and be completed in early to mid-September.
The Court is expected to rule on these motions at a hearing scheduled for July 27-29, 2005.
Peter Lynch, President and Chief Executive Officer of Winn-Dixie, said: “To date, we have sales agreements for 79 stores. 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.”
About Winn-Dixie
Winn-Dixie Stores, Inc. is one of the nation's largest food retailers. Founded in 1925, the Company is headquartered in Jacksonville, FL. For more information, please visit http://www.winn-dixie.com.
More information about Winn-Dixie's reorganization, including a map and list of stores affected by the June 21st “footprint” announcement and those for which we have received preliminary bids, is available on the Company’s Web site at http://www.winn-dixie.com or as follows: Customers: 1-866-WINN-DIXIE (1-866-946-6349); Media: 1-866-449-8608; Investors: 1-212-521-4835.
Forward-Looking Statements
Certain statements made in this press release may constitute "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from the expected results described in the forward-looking statements. These forward-looking statements include and may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes," or "intends" and similar words and phrases. There are a number of factors that could cause the Company's actual results to differ materially from the expected results described in the Company's forward-looking statements, particularly while the Chapter 11 cases are proceeding.
There can be no assurance that the Company's Chapter 11 reorganization process will be successful. Risk factors related to its efforts include, but are not limited to, the following: the Company's ability to continue as a going concern and to create positive cash flow from operations; the ability of the Company to operate under the terms of the Company's DIP credit facility; the Company’s ability to obtain court approval of the motions filed with the bankruptcy court from time to time in the Chapter 11 process; the Company’s ability to successfully implement key elements of its restructuring, including the sale or closure of selected retail DMAs, the sale or closure of under-performing stores in retained DMAs and the sale or closure of excess distribution and manufacturing facilities, as well as the ability to appropriately align general and administrative expenses of the resulting organization; the ability of the Company to obtain and maintain trade credit and shipments and terms with vendors and service providers for current and future orders and to maintain in-stock positions for all of its product offerings; the ability of the Company to develop, confirm and consummate a plan or plans of reorganization; risks associated with third parties seeking and obtaining court approval to terminate or shorten plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the potential adverse impact of the Chapter 11 cases on the Company's liquidity and results of operations; the Company's ability to maintain contracts that are critical to its operations; the ability of the Company to attract and retain customers; the ability of the Company to attract, motivate and retain key executives and associates; and potential adverse publicity.
In addition, the Company faces a number of risks with respect to its continuing business operations, including but not limited to: the Company's ability to execute its strategic initiatives, including asset rationalization, store upgrades, expense reduction, brand positioning and customer service, and to fund its initiatives; the success of the Company’s initiatives to increase sales and market share, particularly in light of over two years of sustained sales declines; the Company's ability to increase capital spending levels in the future to invest in its store base and other capital projects; the Company's response to the entry of new competitors in its markets, including traditional grocery store openings and the entry of non-traditional grocery retailers such as mass merchandisers, supercenters, warehouse club stores, dollar-discount stores, drug stores and conventional department stores; and the Company’s ability to complete its assessment of internal control over financial reporting under the Sarbanes-Oxley Act of 2002 on a timely basis and without identifying any material weaknesses.
Please refer to discussions of these and other factors in this news release, in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2004, the Quarterly Report on Form 10-Q for the quarter ended April 6, 2005, and other Company filings with the Securities and Exchange Commission. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly revise or update these forward-looking statements, whether as a result of new information, future events or otherwise.
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News Release #6001