David Adame  /  AP file
As part of its bankruptcy reorganization plan, Winn-Dixie said it will cease operations in Tennessee, Virginia and the Carolinas, and trim operations in its five remaining states, Florida, Georgia, Alabama, Mississippi and Louisiana.
updated 6/21/2005 6:36:44 PM ET 2005-06-21T22:36:44

Bankrupt supermarket chain Winn-Dixie said Tuesday it will cut 22,000 jobs, or 28 percent of its work force, as it shutters 326 stores in an attempt to emerge from bankruptcy.

The company is closing 35 percent of its outlets under a proposed Chapter 11 reorganization plan. An additional 500 workers will lose their jobs at its Jacksonville headquarters.

Winn-Dixie Stores Inc. will cease operations in four states — Tennessee, Virginia and North and South Carolina — and trim businesses in Florida, Georgia, Alabama, Mississippi and Louisiana. It will exit the Atlanta market.

The company said it will try to sell six dairy plants, its pizza plant in Montgomery, Ala., and its Chek Beverage/Deep South Products plant in Fitzgerald, Ga., which produces Chek soda, shelf-stable juices and condiments. If buyers are not found, the company said it would continue to operate the Chek Beverage plant and its dairies in Hammond, La., and Plant City, Fla.

Winn Dixie also said it is working to find a third party to produce elsewhere the items made at its Astor Products plant in Jacksonville and the condiments at the Deep South plant. The plants will then be closed.

“We made a very detailed announcement, and I am confident we are making the right decision,” said Peter Lynch, company president and CEO. Lynch had said for months that the reorganized company must be smaller and that it was difficult to determine which stores to close.

“We’ve done a deep dive in every store,” he said at a news conference.

Winn-Dixie is leaving a number of larger markets, including Augusta and Savannah in Georgia; Charleston, Columbia and Greenville-Spartanburg in South Carolina; Charlotte, Greensboro-High Point and Raleigh-Durham in North Carolina; Chattanooga, Tenn.; Columbus, Tupelo and Jackson in Mississippi and Alexandria, La.

Burt P. Flickinger III, managing director of Strategic Resources Group in New York, said he doesn’t believe the changes will save Winn-Dixie, which must still battle rivals Publix Super Markets Inc. and Wal-Mart Stores Inc.

“They really need to close over 500” stores, Flickinger said. “Sadly, they cut too far at corporate headquarters and haven’t sufficiently cut the number of stores.”

“Their sales, merchandising and operations plan has gone from bad to worse. It’s going to kill the company between this Christmas and next Christmas,” Flickinger said.

Mark Hamstra of Supermarket News said Winn-Dixie still needs to define itself and find a niche. But he thinks the decision to close stores should help.

“It looks like they are getting rid of their weakest performing stores. That should help reduce their overhead and bring them closer to profitability,” Hamstra said.

Winn-Dixie, which filed for bankruptcy on Feb. 21, was No. 182 on the 2005 Fortune 500 list of the country’s largest corporations. It ranked No. 8 among 19 food and drug store companies, while Lakeland-based Publix was ranked No. 6 among supermarkets and No. 117 overall.

The Jacksonville-based supermarket chain listed assets of $2.2 billion and liabilities of $1.9 billion in a February bankruptcy filing.

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