US grocery retailer Winn-Dixie Stores has announced that it has filed for voluntary reorganisation under Chapter 11 of the US Bankruptcy Code.
The company said the decision was taken in order “to address the financial and operational challenges that have hampered its performance”.
Winn-Dixie said all its 920 stores are open for business and it has obtained US$800m debtor-in-possession financing commitment from Wachovia Bank, which will be used to supplement the company’s cash flow during the reorganisation process.
Winn-Dixie intends to use the reorganisation process to take additional action to improve its operations and financial performance and strengthen its business. As part of its Chapter 11 restructuring, the company plans to implement further asset rationalisation, additional asset sales and expense reduction plans to enhance productivity and take best advantage of its asset base.
“We intend to use this reorganisation 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,” said president and chief executive Peter Lynch.
“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 organisation. 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,” Lynch added.