SEG to file for bankruptcy, close nearly 200 stores

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by architect » February 17th, 2018, 8:13 pm

pseudo3d wrote:
February 17th, 2018, 11:46 am
wnetmacman wrote:
February 17th, 2018, 7:27 am
storewanderer wrote:
February 16th, 2018, 11:32 pm
Here's Albertsons chance to expand in Florida.
Chance, yes. Ability, sadly, no. Unless Albertsons can find a bank willing to lend them money, it won't happen. It's just too much right now.
pseudo3d wrote:
February 17th, 2018, 12:02 am
Maybe. The 200 stores to close sound like the worst stores that nobody really would want. Of course, when they do close stores they'll probably be more open to asset sales.
An SEG asset sale would be akin to an antique sale. I think that's part of the reason they haven't sold the chain yet; there's nothing usable for anyone there.
pseudo3d wrote:
February 16th, 2018, 11:30 pm
Oof. I was right though, wasn't I? Officially it hasn't happened yet but "nearly 200 stores" sounds about right. While that's pretty heavy (between a fourth and a third of the chain), from what wnetmacman says at least that amount of the chain are not very good stores and aren't fit for much anyway. I'd be interested in where those stores are. Personal predictions say that 30 Harveys will close (about half of that name), about 6 for Fresco y Más (a third), 20 out of Alabama, 8 out of MS (already they're down to 11), 40 assorted Bi-Lo stores, and about 85 assorted Winn-Dixie stores out of Florida (a fourth of the stores there, heavily affecting former Sweetbay stores).
Always nice to be remembered. I would say that with a few newer stores, most of the WD store fleet is in excess of 20 years old. Not sure of Bi-Lo, as I don't live close to one, but I don't believe numbers there are any different. I think it's a last ditch effort to jettison really dead weight (LA, MS, AL and GA) and make WD a Florida-only chain. That would make more sense at this point. And I believe they could find buyers for the remaining stores. In Louisiana for sure, the Baton Rouge Shoppers Value franchisee has been gobbling them up, and Rouses may be interested in some stores.

If SEG files for bankruptcy, expect a conversion late in the game to liquidation, and a possible selloff (of the fire sale variety) possibly to Albertsons if they can get the money to expand. I don't think any of the stores fit Kroger's mentality.
I think this first round is going to be similar to the first round of Albertsons LLC closures, that is, the stores that weren't profitable or marginally profitable but not worth enough to keep around. And guess what? Very few, if any, are still operating as supermarkets. Nobody is going to want the 200 stores SEG is closing, not Albertsons, not Kroger, not Publix. Some may be reopened as Walmart Neighborhood Market or even Food Lion but that's not a sure thing. Most of the first 200 stores will probably be largely Harveys stores or stores that were slated to become Harveys, and history will repeat itself with Harveys being the new SaveRite.

The thing with Albertsons/Safeway and Winn-Dixie in Florida is that Albertsons knows that the stores it would really like to have are Winn-Dixie's better, nicer stores, but SEG won't sell those until the very end. If SEG is able to get their store count under 200 with a Florida-centric collection of the best W-D stores, then I can see that finally happening. As it stands, SEG will still have over 500 stores even after the round of closures. Their best and perhaps only option right now is to make that the goal (even if Albertsons isn't the ultimate buyer). Close down the worst stores, sell off the non-core stores, and reinvest in that core.
Personally, I don't think that Winn-Dixie could keep going for long even as a slimmed down Florida-only operation. With a store base that small, they simply lose any ability to be competitive on price. At that point, Publix and Wal-Mart could easily make a run at a price war to drive them out of business. My guess is that the majority of stores will close completely, with Albertsons potentially picking up a few of the prime locations.

As far as Lousiana goes, I think that Rouses will be the likely beneficiary in a market-share sense, even if they do not reopen in all of the former Winn-Dixie locations. I anticipate that many of the former Winn-Dixie locations will not even reopen as grocers at all, considering how outdated and undersized the store base is as a whole. This could also give Albertsons an opportunity to expand in the market, though my guess is that they will not pursue such a move considering how ill-fated their last Lousiana expansion was. Bi-Lo will be interesting to watch, as some of their best stores could potentially be targets for Publix, as Knight said.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by pseudo3d » February 17th, 2018, 8:56 pm

architect wrote:
February 17th, 2018, 8:13 pm
Personally, I don't think that Winn-Dixie could keep going for long even as a slimmed down Florida-only operation. With a store base that small, they simply lose any ability to be competitive on price. At that point, Publix and Wal-Mart could easily make a run at a price war to drive them out of business. My guess is that the majority of stores will close completely, with Albertsons potentially picking up a few of the prime locations.

As far as Lousiana goes, I think that Rouses will be the likely beneficiary in a market-share sense, even if they do not reopen in all of the former Winn-Dixie locations. I anticipate that many of the former Winn-Dixie locations will not even reopen as grocers at all, considering how outdated and undersized the store base is as a whole. This could also give Albertsons an opportunity to expand in the market, though my guess is that they will not pursue such a move considering how ill-fated their last Lousiana expansion was. Bi-Lo will be interesting to watch, as some of their best stores could potentially be targets for Publix, as Knight said.
I'm not sure anymore on size vs. able to compete on price. H-E-B and others are smaller entities than Albertsons/Safeway and the latter still fails to do on almost every count. Of course, SEG's issue is the same as Albertsons, pushing around a lot of debt.

I do have to say that Albertsons' last Louisiana expansion wasn't exactly ill-fated. They expanded on a handful of Skaggs Albertsons sites in the 1990s to create a solid market base in Baton Rouge and Lafayette, and only a few closed during the scale-backs in 2002, 2006, and a few since then. Like many of their other stores, some were ill-placed (the Baker, LA store, located in a former Kmart, comes to mind). New Orleans was a bit different, and that wasn't until the late 1990s. Wnetmacman says that they couldn't adapt to the local market, and that may be true (I wasn't there, of course, so I can't say one way or another) but they were never able to gain traction. They only opened six (including the one in Mandeville) before they pulled the plug in 2004, and that was a time when Albertsons was shrinking as a whole. I remember reading (though I didn't save the source) that A&P had done something to prevent Albertsons from getting its hands on former Schwegmann sites, though from researching they did operate one briefly (though probably in half of the store, no way did Albertsons operate a 100,000+ square foot store). Even if they were able to get into New Orleans (and get one of the few new build Winn-Dixie stores opened in this decade), their lack of marketing in the areas they have and their struggle in new markets (the only markets Albertsons has really re-entered since 2006 is the former A&P stores, and those aren't doing well) undermine my confidence that they'll do well at all.

Knight wrote:
February 17th, 2018, 4:39 pm
Stores likely to close have expiring leases, have reduced hours of operation, have closed food (grocery, meat, produce, seafood) and pharmacy departments, and have fewer associates. I project 200 to 300 stores will close, Winn-Dixie exits Louisiana and Mississippi, and BI-LO and Harvey's exit North Carolina and Chesterfield, Darlington, Dillon, Florence, Georgetown, Horry, Lancaster, Marlboro, Williamsburg, and York counties in South Carolina.
I don't think the first round will cause SEG to exit whole states when there's still viable stores (okay, maybe MS, but that's it). The first stores to close will probably be losers spread throughout the chain.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by Knight » February 18th, 2018, 6:11 am

pseudo3d wrote:
February 17th, 2018, 8:56 pm
I don't think the first round will cause SEG to exit whole states when there's still viable stores (okay, maybe MS, but that's it). The first stores to close will probably be losers spread throughout the chain.
How could I be convinced Winn-Dixie is viable in Mississippi and Louisiana; BI-LO is viable in Georgia, North Carolina, and northeastern South Carolina; and Harvey's is viable in North Carolina and South Carolina? There are stores operating in failed markets that should be unloaded.

I fear the number of stores that could close for being constant losers or in markets designated to exit would exceed 200.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by pseudo3d » February 18th, 2018, 12:54 pm

Knight wrote:
February 18th, 2018, 6:11 am
pseudo3d wrote:
February 17th, 2018, 8:56 pm
I don't think the first round will cause SEG to exit whole states when there's still viable stores (okay, maybe MS, but that's it). The first stores to close will probably be losers spread throughout the chain.
How could I be convinced Winn-Dixie is viable in Mississippi and Louisiana; BI-LO is viable in Georgia, North Carolina, and northeastern South Carolina; and Harvey's is viable in North Carolina and South Carolina? There are stores operating in failed markets that should be unloaded.

I fear the number of stores that could close for being constant losers or in markets designated to exit would exceed 200.
The first 200 stores are closures, not sale candidates, and that includes things like Winn-Dixie in New Orleans which has a 2010 store holding its own against Rouses and several other stores. A Baton Rouge store recently did some upgrades to compete with a Rouses going in across the street (it probably won't save it). A&P had held on for years in New Orleans long after it had retreated to all but the Northeast, and I wouldn't be surprised if Winn-Dixie was carrying that sort of legacy.

That being said, I definitely see an exit from MS and non-New Orleans Louisiana within eight months. It is all speculation, though. We'll see what the first closing list actually says.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by wnetmacman » February 18th, 2018, 2:33 pm

pseudo3d wrote:
February 18th, 2018, 12:54 pm
The first 200 stores are closures, not sale candidates, and that includes things like Winn-Dixie in New Orleans which has a 2010 store holding its own against Rouses and several other stores. A Baton Rouge store recently did some upgrades to compete with a Rouses going in across the street (it probably won't save it). A&P had held on for years in New Orleans long after it had retreated to all but the Northeast, and I wouldn't be surprised if Winn-Dixie was carrying that sort of legacy.

That being said, I definitely see an exit from MS and non-New Orleans Louisiana within eight months. It is all speculation, though. We'll see what the first closing list actually says.
Historical closings within WD and SEG have always been either a small scattering of stores around all divisions (recent 20-30 store closings), or entire divisions (Texas, Thriftway, etc.). Typically, when it's this large of a number, it's an entire division or two. I do not believe any banner will be spared, as this is SEG even though Wall Street news agencies are pinning it all on WD. If it is solely WD, expect it to be everything outside Florida.

Since Rouses got the lion's share of A&P's New Orleans division, WD has fallen heavily from favor. That new store design? It was built across the street from a store that had failed pre-Katrina. The new store is still open, but it isn't the store killer WD hoped. A similar store was built across the lake in Covington, and it doesn't draw the traffic either, because, as the locals have said, it's still Winn Dixie. They have the worst pricing and a good deal of stale ideas and products that have kept them open, mostly out of sentiment. Sentiment doesn't pay the bills.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by pseudo3d » February 18th, 2018, 3:01 pm

wnetmacman wrote:
February 18th, 2018, 2:33 pm
pseudo3d wrote:
February 18th, 2018, 12:54 pm
The first 200 stores are closures, not sale candidates, and that includes things like Winn-Dixie in New Orleans which has a 2010 store holding its own against Rouses and several other stores. A Baton Rouge store recently did some upgrades to compete with a Rouses going in across the street (it probably won't save it). A&P had held on for years in New Orleans long after it had retreated to all but the Northeast, and I wouldn't be surprised if Winn-Dixie was carrying that sort of legacy.

That being said, I definitely see an exit from MS and non-New Orleans Louisiana within eight months. It is all speculation, though. We'll see what the first closing list actually says.
Historical closings within WD and SEG have always been either a small scattering of stores around all divisions (recent 20-30 store closings), or entire divisions (Texas, Thriftway, etc.). Typically, when it's this large of a number, it's an entire division or two. I do not believe any banner will be spared, as this is SEG even though Wall Street news agencies are pinning it all on WD. If it is solely WD, expect it to be everything outside Florida.

Since Rouses got the lion's share of A&P's New Orleans division, WD has fallen heavily from favor. That new store design? It was built across the street from a store that had failed pre-Katrina. The new store is still open, but it isn't the store killer WD hoped. A similar store was built across the lake in Covington, and it doesn't draw the traffic either, because, as the locals have said, it's still Winn Dixie. They have the worst pricing and a good deal of stale ideas and products that have kept them open, mostly out of sentiment. Sentiment doesn't pay the bills.
The Texas division was closed in 2002 before the bankruptcy and was definitely a loser. Their stores weren't doing well in any market (in Dallas, Tom Thumb, Albertsons, Kroger, and even Minyard all came out ahead) and the 2005 bankruptcy was across the board with closures from Louisiana to Virginia (officially, only one store closed in the 257 closures of summer 2005, though I don't know if that was the last one or the others filed out shortly afterward).

That being said, if "nearly 200" stores are being closed, they could close each and every Winn-Dixie branded store outside of Florida and still have about 60 to 70 to go. But I can't imagine they'd close profitable non-Florida stores and leave the losers in Florida still active (or the losers in BI-LO). I still maintain that the first round will still definitely leave New Orleans intact.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by wnetmacman » February 19th, 2018, 8:39 am

pseudo3d wrote:
February 18th, 2018, 3:01 pm
The Texas division was closed in 2002 before the bankruptcy and was definitely a loser. Their stores weren't doing well in any market (in Dallas, Tom Thumb, Albertsons, Kroger, and even Minyard all came out ahead) and the 2005 bankruptcy was across the board with closures from Louisiana to Virginia (officially, only one store closed in the 257 closures of summer 2005, though I don't know if that was the last one or the others filed out shortly afterward).
The 2005 bankruptcy was not so much to get rid of bad stores as it was to dump old inactive leases and restructure debt. WD, you see, had the habit at that time of squatting on closed store leases. We had a perfect example close to me in Scott, LA. Scott's WD was replaced in 1997 with the Lafayette Ambassador store that closed in 2015 or so. Until the bankruptcy, the Scott store sat empty, equipment and all, because WD didn't want to lease it to a grocery operator, and nobody else wanted to be in Scott at that point. Within days of the lease being voided during the Chapter 11 process, a local Piggly Wiggly operator moved in, and has done incredibly well there, even recently replacing all of the leftover refrigeration equipment that WD left behind during its most recent remodel.

Texas store leases were also included in this, as they were also still holding multiple leases there.
pseudo3d wrote:
February 18th, 2018, 3:01 pm
That being said, if "nearly 200" stores are being closed, they could close each and every Winn-Dixie branded store outside of Florida and still have about 60 to 70 to go. But I can't imagine they'd close profitable non-Florida stores and leave the losers in Florida still active (or the losers in BI-LO). I still maintain that the first round will still definitely leave New Orleans intact.
I don't believe the WD nameplate will be the only place where the 200 stores are included. I believe it will run across all banners, including Harvey's, Fresco y Mas and Bi-Lo. I don't think we'll lose any single nameplate, but I do believe the Louisiana division will be closed, and possibly sold off piecemeal to multiple operators, as companies like Rouses won't want to buy older stores in towns where they already operate, but they could expand to towns West of the Mississippi river like Crowley, Abbeville, Rayne, New Iberia, Franklin, Breaux Bridge and Eunice where they currently do not operate. I could see the Louisiana Shoppers Value group get a lot of the northshore stores, and possibly make their way into New Orleans. Brookshire may also sneak in, though they already have stores in Eunice, New Iberia and Abbeville.

All in all, we'll have to see if and when a filing is made. Many of the news outlets are reporting that the filing will be by Bi-Lo, LLC, and not Southeastern Grocers.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by wnetmacman » February 22nd, 2018, 6:52 pm

And we have at least the first 8 stores. WD is leaving everywhere west of the Mississippi:

8 Winn Dixie stores to become Super 1 Foods

Brookshire Grocery company will purchase stores in Abbeville, Breaux Bridge, Crowley, Eunice, Franklin, Rayne, New Roads and New Iberia Louisiana. I would suspect in Abbeville and Eunice the stores will be replacing older Delchamps locations that Super 1 has occupied since 2001. I'm not sure about New Iberia; that one is a surprise as Super 1 is just about a mile south of the Winn Dixie location there.

Let the fun begin!

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by architect » February 22nd, 2018, 7:36 pm

wnetmacman wrote:
February 22nd, 2018, 6:52 pm
And we have at least the first 8 stores. WD is leaving everywhere west of the Mississippi:

8 Winn Dixie stores to become Super 1 Foods

Brookshire Grocery company will purchase stores in Abbeville, Breaux Bridge, Crowley, Eunice, Franklin, Rayne, New Roads and New Iberia Louisiana. I would suspect in Abbeville and Eunice the stores will be replacing older Delchamps locations that Super 1 has occupied since 2001. I'm not sure about New Iberia; that one is a surprise as Super 1 is just about a mile south of the Winn Dixie location there.

Let the fun begin!
Though this is doubtful, I wonder if Brookshire's might be interested in more Winn-Dixie castoffs? If the price was right, possibly. However, I think that this is unlikely considering that the next eastward market for Winn Dixie would put them in either baton Rouge or New Orleans, both markets which are far more competitive than the small towns which Brookshire's is taking on this time around.

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Re: SEG to file for bankruptcy, close nearly 200 stores

Post by wnetmacman » February 22nd, 2018, 7:39 pm

architect wrote:
February 22nd, 2018, 7:36 pm
Though this is doubtful, I wonder if Brookshire's might be interested in more Winn-Dixie castoffs? If the price was right, possibly. However, I think that this is unlikely considering that the next eastward market for Winn Dixie would put them in either baton Rouge or New Orleans, both markets which are far more competitive than the small towns which Brookshire's is taking on this time around.
Brookshire is already familiar to several of these towns, as they already have stores in Abbeville, Eunice and New Iberia. Rayne and Crowley are a bit out of range, as is Franklin and New Roads. Breaux Bridge is close enough to Lafayette where the store should work well for them.

I don't think they'd be interested in going to Baton Rouge; it's too much of a stretch for their distribution.

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