JACKSONVILLE, Fla. — Winn-Dixie Stores Inc. will close 30 underperforming stores and consolidate its four operating regions into three. The company also reaffirmed its earnings guidance for fiscal 2010 despite what it described as a deteriorating sales environment.
Winn-Dixie Stores Inc. will close 30 underperforming stores and consolidate its four operating regions into three. The company also reaffirmed its earnings guidance for fiscal 2010 despite what it described as a deteriorating sales environment.
"We continue to operate in a particularly difficult economic and retail environment in the Southeast," said chairman, president and chief executive officer Peter Lynch in a statement. "To respond to these business and economic conditions, we have thoroughly reviewed our retail operations and support structure and have decided to exit certain retail locations and reduce our corporate and field support staffs."
In addition to the loss of store-level jobs, Winn-Dixie is eliminating approximately 120 positions in its corporate and field support staffs. It expects to achieve annualized savings between $12 million and $17 million after the end of the first quarter of fiscal 2011 on September 22. The store closings and job cuts are expected to be completed by then.
"The actions we are taking today will enable us to lower our cost structure, improve efficiency and build the right foundation for our business now and in the future," Lynch added. "With nearly half of our store base already remodeled, and with plans in place for additional remodels and new store openings, we are confident we will continue making significant progress with our ‘fresh and local’ strategy and business initiatives."
As a result of the closings and head-count reduction, Winn-Dixie expects to book charges between $35 million and $50 million during the first quarter of fiscal 2011, including lease-related items totaling $30 million to $45 million, with other charges, including severance, of about $5 million.
In Winn-Dixie’s remodeled stores sales have increased about 6%, which has not been enough to overcome the tough macroeconomic environment and stiff competition in the Southeast.