Ian McLeod out as Southeastern Grocers CEO

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Ian McLeod out as Southeastern Grocers CEO

Post by cathandler »

The parent company of Winn-Dixie and Bi-Lo continues to struggle
http://www.supermarketnews.com/executiv ... rn-grocers
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by wnetmacman »

Because he was doing such a bang-up job, right?

Honestly, this probably isn't a surprise to anyone here. This is the part of the movie where the Titanic started to break in half...

Truly, I am afraid to ask who steps in next.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by pseudo3d »

wnetmacman wrote:Because he was doing such a bang-up job, right?

Honestly, this probably isn't a surprise to anyone here. This is the part of the movie where the Titanic started to break in half...

Truly, I am afraid to ask who steps in next.
To be honest, I wasn't expecting this to happen until later. If this isn't the part where LSF gives up and starts to divest the entire company piece by piece, they need to take some pretty dramatic steps to turn around the company, and they don't have a lot of wiggle room. Largely getting rid of Harveys and Fresco y Mas should be the first order of business. Get rid of BI-LO...that store was a drag to Winn-Dixie, and if Lidl plays its cards right, it can take those stores down, especially since Food Lion is actually ready to fight. Pull out of Louisiana entirely...I don't think the New Orleans stores can be saved, and pull out of Mississippi too. That way, they can get rid of two divisions, the Louisiana division and the MS/AL division, with the AL stores to be merged with North Florida. Finally, put some money into operations and remodels (Jacksonville) and not just bad repaints.

If there was ever a time to fight back, now is that time.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

Under McLeod, Southeastern Grocers exited Tennessee and northern Georgia; launched Fresco y Más through Winn-Dixie stores; initiated the closing of several stores by closing service departments (grocery, meat, pharmacy, produce, seafood), reducing hours of operation, and eliminating full-time hourly positions; converted BI-LO and Winn-Dixie stores to Harvey's Supermarket; and should be completing the process of closing 24 stores chain-wide.

Regardless who succeeds McLeod as President and Chief Executive Officer, Southeastern Grocers remains a disaster. I project more stores will close or be sold, and departures from markets will occur.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by storewanderer »

This is not surprising, we will see where this guy goes next. We will also see who replaces him for clues.

Save Mart's head recently retired and the guy they hired is a previous executive of Grand Union and A&P. He was the Chief Restructuring Officer at A&P when it went out of business. That may or may not be a clue about what is going on at Save Mart but it is an interesting resume.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

pseudo3d wrote: To be honest, I wasn't expecting this to happen until later. If this isn't the part where LSF gives up and starts to divest the entire company piece by piece, they need to take some pretty dramatic steps to turn around the company, and they don't have a lot of wiggle room. Largely getting rid of Harveys and Fresco y Mas should be the first order of business. Get rid of BI-LO...that store was a drag to Winn-Dixie, and if Lidl plays its cards right, it can take those stores down, especially since Food Lion is actually ready to fight. Pull out of Louisiana entirely...I don't think the New Orleans stores can be saved, and pull out of Mississippi too. That way, they can get rid of two divisions, the Louisiana division and the MS/AL division, with the AL stores to be merged with North Florida. Finally, put some money into operations and remodels (Jacksonville) and not just bad repaints.

If there was ever a time to fight back, now is that time.
Lone Star Funds is past the point to unload Southeastern Grocers. No one wants to acquire a disaster.

What would I do if I were Southeastern Grocers?
  • Close low performing stores that have closed service departments (i.e. pharmacy), reduced hours of operation, and/or have expiring leases.
  • Exit Louisiana, Mississippi, and North Carolina.
  • Divest quality BI-LO stores to another supermarket participant that is increasing store count in Georgia, North Carolina, and South Carolina.
  • Divest the remainder of Southeastern Grocers to a larger supermarket competitor (i.e. Albertson's).
Food Lion is ready to fight? It is just as bad of a disaster as Southeastern Grocers is. Minimal store updates, extra high prices, and lack of food and pharmacy departments in most stores do not help a supermarket remain competitive against supermarkets Publix and Walmart Neighborhood Market and limited assortment/discount grocers Aldi and Lidl.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by wnetmacman »

pseudo3d wrote:Largely getting rid of Harveys and Fresco y Mas should be the first order of business. Get rid of BI-LO...that store was a drag to Winn-Dixie, and if Lidl plays its cards right, it can take those stores down, especially since Food Lion is actually ready to fight.
Evidently, the Harvey's stores and the Fresco Y Mas stores aren't the drag, because most of them have been remodeled and are working.
pseudo3d wrote:Pull out of Louisiana entirely...I don't think the New Orleans stores can be saved, and pull out of Mississippi too. That way, they can get rid of two divisions, the Louisiana division and the MS/AL division, with the AL stores to be merged with North Florida.
Pulling out of Louisiana would mean pulling out of Mississippi, because the remaining MS stores are part of the New Orleans division. The two Meridian stores are the northermost stores now.
pseudo3d wrote:Finally, put some money into operations and remodels (Jacksonville) and not just bad repaints. If there was ever a time to fight back, now is that time.
Fighting back requires money. I doubt they will have any after this. I see a buyout or bankruptcy coming; I just don't know who will buy them.
storewanderer wrote:This is not surprising, we will see where this guy goes next. We will also see who replaces him for clues.

Save Mart's head recently retired and the guy they hired is a previous executive of Grand Union and A&P. He was the Chief Restructuring Officer at A&P when it went out of business. That may or may not be a clue about what is going on at Save Mart but it is an interesting resume.
This seems to be the order of the day for most failing retailers. Remember when Ames hired Joseph Ettore? He led several companies out.
Knight wrote:Regardless who succeeds McLeod as President and Chief Executive Officer, Southeastern Grocers remains a disaster. I project more stores will close or be sold, and departures from markets will occur.
Until someone competent takes over, a disaster it shall remain.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

wnetmacman wrote:
pseudo3d wrote:Largely getting rid of Harveys and Fresco y Mas should be the first order of business.
Evidently, the Harvey's stores and the Fresco Y Mas stores aren't the drag, because most of them have been remodeled and are working.
Which markets are Harvey's Supermarket and Fresco y Más working from their BI-LO and Winn-Dixie conversions? Those stores are still facing better competition with supermarkets Harris Teeter, Kroger, Publix, and Walmart Neighborhood Market and hypermarket Walmart Supercenter.

I can see Publix opening more stores in Harvey's Supermarkets' original footprint across southern Georgia. Publix's Atlanta and Jacksonville divisions would have more stores.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

wnetmacman wrote:
pseudo3d wrote:Pull out of Louisiana entirely...I don't think the New Orleans stores can be saved, and pull out of Mississippi too. That way, they can get rid of two divisions, the Louisiana division and the MS/AL division, with the AL stores to be merged with North Florida.
Pulling out of Louisiana would mean pulling out of Mississippi, because the remaining MS stores are part of the New Orleans division. The two Meridian stores are the northermost stores now.
The Mississippi stores (Winn-Dixie) are in the Alabama/Mississippi region. The Louisiana stores (Winn-Dixie) are in the Louisiana region. Both Alabama/Mississippi and Louisiana regions are becoming increasing irrelevant with fewer stores and increased competition. Mississippi could be in position to see Publix enter.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by pseudo3d »

Knight wrote:
The Mississippi stores (Winn-Dixie) are in the Alabama/Mississippi region. The Louisiana stores (Winn-Dixie) are in the Louisiana region. Both Alabama/Mississippi and Louisiana regions are becoming increasing irrelevant with fewer stores and increased competition. Mississippi could be in position to see Publix enter.
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.
wnetmacman wrote: Evidently, the Harvey's stores and the Fresco Y Mas stores aren't the drag, because most of them have been remodeled and are working.
If I recall correctly, the only person who said something along those lines was McLeod. Most of us on the "outside" saw where Harveys was going, resembling Winn-Dixie's SaveRite stores, none of which lasted very long despite Winn-Dixie's attempt at using it to save dying stores.
Fighting back requires money. I doubt they will have any after this. I see a buyout or bankruptcy coming; I just don't know who will buy them.
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
edit due to broken tags
Last edited by pseudo3d on June 20th, 2017, 12:01 pm, edited 1 time in total.
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