[StBernard] Winn-Dixie builds on N.O. brand

[Westley Annis]

Winn-Dixie builds on N.O. brand 
by Jaime Guillet 
09/25/2006  
  
Winn-Dixie Stores Inc. President and CEO Peter Lynch says he is looking
forward to breaking free of the company's Chapter 11 bankruptcy chains and
renewing the company brand in some of the most devastated areas of New
Orleans. 
Lynch, who took over as CEO of the Jacksonville, Fla.-based grocery store
chain in December 2004 - two months before the company's voluntary
bankruptcy filing - said his strategic growth plan has New Orleans at the
top of the list. 

The company plans to spend $25 million to reopen stores in the New Orleans
area. On Friday, the company will reopen its Gentilly store at 4600 Chef
Menteur Highway and will reopen its Chalmette store on Paris Road Oct. 13 -
the same day Winn-Dixie is scheduled to emerge from bankruptcy. 

"Going ahead with these two stores that we've remodeled down there -
Gentilly and Chalmette - should demonstrate to everybody in New Orleans that
we think we've got a wonderful opportunity but more importantly we want to
grow as New Orleans grows for the future," said Lynch. 


Retail pioneers 

Is it a gamble for a company emerging from bankruptcy to reopen stores in a
disaster area such as New Orleans? No, said Eric Smith, a private equity and
venture capital professor at Tulane University's A.B. Freeman School of
Business. 

"As long as they open these stores as the neighborhoods come back, instead
of opening 30 stores someplace like the Lower Ninth (Ward), they'll do
fine," said Smith. 

Opening in a hard-hit area could be a smart move, said Smith. He said
placing stores in underserved areas Winn-Dixie expects to rebound could be a
smart move, especially with tax breaks from the Gulf Opportunity Zone Act,
which provides labor grants and a special depreciation allowance for GO Zone
properties, said Smith. 

Joey Medina, regional vice president of Winn-Dixie New Orleans, said
business has been great. 

"The sales results for the stores that are open and that I oversee have been
just phenomenal - strong double-digit increases," said Medina. "The customer
count versus same time last year is a double-digit increase. Business has
been very good for us. It's certainly a big opportunity market for us as it
relates to our entire company." 


'Lost trust' 

Winn-Dixie's brand has a strong following in Louisiana but its image was
suffering before the bankruptcy, said Lynch. 

"When I speak about brand, the brand is all about trust," said Lynch. "Prior
to my getting here we had lost the trust with customers, our associates and
with our vendors. As a result, customers would drive by a Winn-Dixie and go
to a competitor. We've been very busy during the past 20 months building
that trust back with our consumers, our associates and our vendors and I'm
pleased to say we made a lot of progress." 

Companywide changes Lynch implemented have helped revive the store's image
with customers, associates and vendors, said Medina. The company is
remodeling most stores, fully stocking shelves, adding staff to ensure quick
checkout and embracing industry trends such as organic products, he said. 

"I know other stores have expanded those varieties and Winn-Dixie has as
well. 

Lynch said he is intent on keeping Winn-Dixie in the New Orleans market.
Offering better customer service will help the chain make up lost ground, he
said. 

"I think we've been a good corporate citizen there," said Lynch. "We will
continue to be a good corporate citizen and get involved through community
partners. We're here to stay.".