Ian McLeod out as Southeastern Grocers CEO

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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

pseudo3d wrote: That is correct...somewhere on RW someone posted a list of Winn-Dixie's current operating regions, and I think they were North Florida (Jacksonville), Central Florida (Orlando), West Florida (Tampa), and South Florida (Miami), as well as Louisiana and MS/AL. (In fact, I think it was you!)

However, I don't see Publix entering MS for reasons discussed in the "Rouses Market Share" topic (I think that was the one). Kroger is in north MS, but I think Winn-Dixie's former territory will end up being independents. Not that it was doing particularly well before, I believe the Jitney Jungle/Delchamps acquisition was supposed to shore up MS.
Mississippi is a polarizing market with Kroger in Jackson northward and with WInn-Dixie and Rouse's southward.

Publix will enter Mississippi if it enters Memphis, Tennessee.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

pseudo3d wrote: Probably. SEG's owner, Lone Star Funds, specializes in distressed assets, which suggests that at this point, they won't try to save the company beyond trying to make it more suitable for an acquisition, which is still possible. Still, seeing the remains of a nicer Winn-Dixie get bought by Albertsons and then reflagged to Safeway is better than an ugly breakup where the whole company shatters into pieces. By divesting BI-LO (like what they did to Bruno's) and the Louisiana stores, they can get enough money to fix some of the chain's remaining problems.

I largely agree with what Knight said, in order I would:
  • Close 100 underperforming stores straight off
  • Make changes to the operations of North Florida, Central Florida, South Florida, and West Florida that would enable them to be better stores
  • Sell the DCs to C&S and write new supply contract (previously they were just operated by C&S)
  • Sell off Louisiana stores and close the Louisiana division permanently
  • Sell off Mississippi stores and close the MS/AL division, merging the AL stores with North Florida
  • Divest the entirety of BI-LO, the whole chain can be sold as a going concern
  • Close or divest the Harveys/Fresco y Más stores except those that can be re-converted later
  • Combine West Florida and Central Florida into a single Mid-Florida division
  • Engage in remodeled stores and even a few new ones while offering the company for sale
I project Southeastern Grocers will have another round of store closings. There are several BI-LO stores approaching or have surpassed 20 and 25 years of operation that are not doing well and/or are competing against better grocery retailers. Winn-Dixie's Louisiana and Mississippi stores can be included in potential store closings.

I thought C&S Wholesale Grocers already own the former BI-LO and Winn-Dixie distribution centers.

It is now impossible to divest BI-LO as is as a whole. I could see a quantity of quality stores being divested to another supermarket participant like Publix. Any BI-LO store remaining could close.

I would reorganize Winn-Dixie into a banner division with Miami, Orlando, and Jacksonville as the regions. (This would be Winn-Dixie's Florida-based divisions after merging the Tampa Division into the Orlando Division in 2000.) The Alabama stores would be in the Jacksonville region.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by wnetmacman »

Knight wrote:I thought C&S Wholesale Grocers already own the former BI-LO and Winn-Dixie distribution centers.
No. C&S 'operates' them. The employees are C&S employees, the procurement is done by C&S, but the buildings are still owned by SEG.
pseudo3d wrote:SEG's owner, Lone Star Funds, specializes in distressed assets, which suggests that at this point, they won't try to save the company beyond trying to make it more suitable for an acquisition, which is still possible. Still, seeing the remains of a nicer Winn-Dixie get bought by Albertsons and then reflagged to Safeway is better than an ugly breakup where the whole company shatters into pieces. By divesting BI-LO (like what they did to Bruno's) and the Louisiana stores, they can get enough money to fix some of the chain's remaining problems.
I don't see Lone Star having nearly enough interest in saving SEG to break it up. They may not be at the point of no return, but they are heading down that road. A LOT of work would need to be done to the stores to get them up to a saleable condition. Even Albertsons would find these below standards, and they'd have to really work to bring them up. With their current financial condition, they simply cannot afford to do so.

Any company that is set to take over any part of SEG has its work cut out for them. Only a handful of stores are under 10 years old, with some as much as 35-40. That's a lot of modernization needed, both in environmental systems and in store systems. Then there's the condition of most of the buildings...it's just too much. On the stores I've seen other companies take over, most have required massive updates and fixes just to become usable. Rouses has taken over a few stores in Louisiana. They have had to take 3 months to just add small touches and new decor. It's that bad. I've seen bad stores taken over in a week or less. These stores simply need more work to become viable.
Knight wrote:Mississippi is a polarizing market with Kroger in Jackson northward and with WInn-Dixie and Rouse's southward.
Only 11 stores remain (because one in Gulfport is in the process of closing) in Mississippi. I wouldn't call that polarizing. More like frozen.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by storewanderer »

I suppose they could try and sell out to Albertsons, and that may improve things to some extent, but I am not so sure. Would they pattern it after Safeway? Would that actually work? I don't think so. Albertsons can't seem to think for itself anymore, it is just operating like a zombie and far too much of what is happening is old Safeway ideas/ways, but not executed very well. We see now their same store sales losses continue and they have clearly lost their way.

Winn Dixie kind of reminds me of how Supervalu ran its Albertsons Stores, if not a little worse. I do think Winn Dixie's pricing is much better than Supervalu Albertsons, though. The stores seem to be clean but generally dated and not as sparkling as they could be. Perimeters are not explicitly bad but generally less than appealing. It is no way to keep going to market.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

I could agree Albertson's could acquire Winn-Dixie and position them similar to Safeway. Many Winn-Dixie stores would need critical overhauls.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by wnetmacman »

storewanderer wrote:Winn Dixie kind of reminds me of how Supervalu ran its Albertsons Stores, if not a little worse. I do think Winn Dixie's pricing is much better than Supervalu Albertsons, though. The stores seem to be clean but generally dated and not as sparkling as they could be. Perimeters are not explicitly bad but generally less than appealing. It is no way to keep going to market.
We must not be shopping in the same Winn-Dixie stores.

Pricing is a joke. The Down Down was a very feeble attempt at trying to get customers into the stores. Prices that were supposed to stay down often didn't. Sale prices are often higher than other stores' regular prices.

The stores are indeed mostly dated. Almost all here still open have the large 3D Marketplace Decor, which dates back to the Early 90's. For comparison, Albertsons has remodeled stores here three times since the package still seen in these stores was introduced. As for the peripheral departments, the local stores have scaled them all way down. Deli does the exact same hot foods daily. Bakery is limited cakes, cookies and a few donuts daily. Only one store was remodeled, because it was a Marketplace in a small town with two other competitors, then Walmart came in. It has the 2010 package with bright colors, new signage and attractive decor. And it isn't helping any.
Knight wrote:Many Winn-Dixie stores would need critical overhauls.
I suspect the need for overhauls will block most of the larger companies from investing in them, should they break up or sell off.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by klkla »

McLeod has already been appointed CEO of an Asian retailer:
http://www.supermarketnews.com/executiv ... n-retailer

It appeared that maybe he had been forced out by SG earlier this but that is likely not the case based on how soon this announcement was made after his departure.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by pseudo3d »

klkla wrote:McLeod has already been appointed CEO of an Asian retailer:
http://www.supermarketnews.com/executiv ... n-retailer

It appeared that maybe he had been forced out by SG earlier this but that is likely not the case based on how soon this announcement was made after his departure.
That Supermarket News make it sound like McLeod's tenure at SEG was a success when his price cuts killed margins, ended a potential remodeling round, and further cut down the private lines. Uhh...
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by storewanderer »

This is very much a step up for him to move to where he moved. This is interesting. I do not think he got pushed out of Southeastern Grocers. Now we will see what happens next...

May also be a case of leaving before the ground below collapses...
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

pseudo3d wrote:
klkla wrote:McLeod has already been appointed CEO of an Asian retailer:
http://www.supermarketnews.com/executiv ... n-retailer

It appeared that maybe he had been forced out by SG earlier this but that is likely not the case based on how soon this announcement was made after his departure.
That Supermarket News make it sound like McLeod's tenure at SEG was a success when his price cuts killed margins, ended a potential remodeling round, and further cut down the private lines. Uhh...
Southeastern Grocers was a mess prior to McLeod and further declined with him. The ship continues to sink quicker.
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