By Karen Brune Mathis
Managing Editor
Winn-Dixie Stores Inc. Chair, President and CEO Peter Lynch said Monday that the Downtown supermarket, remodeled in 2008, is doing well.
But more could be done.
“We still need to get Downtown fixed,” he said, referring to the success and traffic at the St. Johns Town Center in Southside along Butler Boulevard compared to the struggles in revitalizing Downtown Jacksonville.
The 6-year-old open-air shopping center, he said, is always busy and exudes the energy and the shopping experience that retailers want for successful sales.
Lynch met with Jacksonville reporters Monday afternoon and included the Downtown observations in a discussion of the Jacksonville-based chain’s second-quarter and first-half fiscal financial results. Its 52-week fiscal year ends June 29.
The company, which filed for Chapter 11 bankruptcy protection six years ago in February 2005 and emerged in November 2006, continues operating in what Lynch calls “a challenging economy,” but said sales are improving.
The 86-year-old supermarket chain operates 484 stores in Florida, Georgia, Alabama, Louisiana and Mississippi.
On Monday, Lynch said he is “optimistic about the future of Winn-Dixie.”
He specifically focused on what Winn-Dixie calls its “transformational stores,” which are the supermarkets that are completely remodeled, floor to ceiling and wall to wall, resulting in average per-square-foot sales of $475, compared with $300 for the other stores.
A Winn-Dixie along County Road 210 at the St. Johns and Duval county line is being transformed for completion in June, joining the three other transformational stores in Covington, La., Mobile, Ala., and Margate in South Florida.
The company invests about $5.5 million in the transformed stores vs. $2 million for the basic renovations, he said.
Lynch also said a new store is being built in Islamorada in the Florida Keys.
The 22,000-square-foot store is smaller than the chain’s average store of 47,000 square feet, “but it’s the right size store for the neighborhood and the Keys,” he said.
Asked about possible store closings, Lynch said those are decided when leases near expiration. “I see a handful or so every year,” he said.
Winn-Dixie closed a store along Baymeadows Road near Florida 9A last year as one of 30 stores closed throughout the chain because of the economy.
Asked about the recent departure of senior vice president and chief merchandising and marketing officer Dan Portnoy, Lynch said Portnoy had not moved to Jacksonville. “He made the decision he wanted to get back to his family,” he said. Portnoy joined the company in mid-2007.
In a statement about its financial results, the company said that capital expenditures for fiscal 2011 are expected to be about $132 million, down $26 million from its prior expectations. It anticipates spending about $63 million on the store remodeling program and $69 million for retail store improvements and maintenance, information technology systems, new store development, warehousing and transportation.
It expects to complete five traditional store remodels and two transformational remodels in the fiscal year. The remaining 15 transformational stores scheduled to be completed in the current fiscal year should be completed in the first half of fiscal 2012, according to the company.
“We feel it is appropriate to take a bit more time to refine, construct and launch the next set of these stores,” he said.
Winn-Dixie reported that second-quarter net sales were essentially flat at $2.1 billion compared to the second quarter of the prior year. Identical stores sales fell 0.3 percent.
The company reported a net loss of $24 million for the quarter, compared to net income of $2.1 million the prior year. The second-quarter loss included a deferred tax expense and an increase in operating and administrative expenses. The net loss from continuing operations was $22.3 million.
For the first half of the fiscal year, sales fell $33 million to $3.6 billion, while sales at identical stores fell 1.4 percent.
The company reported a net loss of $100.8 million, compared with a $6 million loss the year before. The net loss from continuing operations was $58.9 million.
“The economy is slowly turning around,” said Lynch. He said the economy in the Southeast has been slow and the turnaround “is not happening quickly.”
Lynch said the quarter was good. “I feel very good about the quarter,” he said. “Sales have improved.”
356-2466