Winn-Dixie Stores has announced in a press release that it will close 30 non-remodelled, underperforming stores, consolidate its four operating regions into three and reduce its workforce in both the field and corporate support levels.
The company also reaffirmed that it expects to report fiscal 2010 Adjusted EBITDA at the low end of its guidance range of US$140-160m, which it believes it has achieved through effective management of its promotional activity and cost control, despite a deteriorating sales environment in the fourth quarter.
The management now plans to hold an investor conference call on Tuesday 31 August to discuss the retailer’s financial results for fiscal 2010 and provide guidance for fiscal 2011, including any additional information on the announcement of the store closures.
“We continue to operate in a particularly difficult economic and retail environment in the Southeast,” said Peter Lynch, Winn-Dixie chairman, CEO and president.
“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. We sincerely regret the impact this will have on some of our associates, and we will make every effort to ensure these associates can pursue other open positions or have a smooth and respectful transition.”
In addition to the staffing reductions that will take place as a direct result of the store closures, the company said it will eliminate approximately 120 positions in its corporate and field support staffs.
The store closures and position eliminations are expected to be completed by the end of the first quarter of fiscal 2011, which ends on 22 September 2010.
“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,” Mr Lynch added.
“With nearly half of our store base already remodelled, and with plans in place for additional remodels and new store openings, we are confident we will continue making significant progress with our ‘Fresh & Local’ strategy and business initiatives.”
A list of the 30 store locations to be closed will be available on the company’s website as of 29 July.
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