Judge Rules Winn-Dixie Can Exit Chapter 11
Jacksonville, Fla., Afederal judge ruled Thursday that Winn-Dixie Stores has met the legal requirements to emerge from more than a year of bankruptcy protection, and the company plans to do so within 30 days. U.S. Bankruptcy Judge Jerry Funk’s decision came after creditors approved the plan last month. The company will emerge from Chapter 11 reorganization once it receives $725 million in exit financing from Wachovia Corp., issues new stock and installs its new board of directors.
The company plans to emerge from bankruptcy, probably in early December, with sufficient financing and liquidity to make investment in its current stores and develop new stores. The company says it will have only a minimal amount of long-term debt on its balance sheet.
The reorganization plan establishes 21 classes of claimants and gets rid of current Winn-Dixie stock. The company plans to issue 50 million shares of stock to cover an estimated $985 million in unsecured claims, according to the plan.
The reorganization plan projects the company will return to profitability beginning in its next fiscal year that starts in June. Winn-Dixie has reported losses of almost $1.3 billion over the past three years.
Reports Predict Holiday Cheer for Retailers
Woburn, Mass., Two different reports point to a promising 2006 holiday shopping for retailers. A recent Prospectiv Consumer Preference Index (CPI) survey found that 68% of consumers surveyed expect to spend more or the same in 2006 when compared to 2005.
Opportunities for on-line sales are also looking favorable this year. In fact, 19% surveyed expect to make more on-line purchases in 2006. Similar to the findings of Prospectiv’s 2005 CPI poll on holiday shopping, the majority of consumers (73%) in 2006 will rely on the Internet to research and compare prices and varieties of holiday products and gifts (up from 71% in 2005).
Top reasons consumers conduct holiday shopping on line include convenience (47%) and avoiding crowds (18%) with better deals coming in third (15%). About 56% of consumers said free shipping would be the top motivator to persuade them to spend more of their holiday dollars on line. <p In other findings, gift-givers are expected to spend a total of $949 on Christmas gifts this year, up 9.1% from the average of $870 spent last year, according to a survey conducted by Unity Marketing. About 69% of gift-givers surveyed say they plan on shopping at discounters this year, down from 78% who planned to shop discount in 2005. The survey also said that about one-third of shoppers have already started their holiday gift shopping and have spent on average just under $300 so far on Christmas 2006 gifts. This is 16% more than they had spent through the same period last year.
Wal-Mart Cuts Prices on Electronics
New York City, Wal-Mart Stores stepped up its discounting Friday in advance of the holiday season, announcing deep price cuts on almost 100 electronics that focused on high-definition TVs, cell phones and digital cameras, according to the Associated Press. The news came a day after the world’s largest retailer announced disappointing October sales and a lackluster November outlook.
The discounts are effective through Dec. 31.
In a release Thursday, Wal-Mart said it planned to “reinforce Wal-Mart’s price leadership position” in such areas as toys and electronics. The discounts on electronics follow Wal-Mart’s move in mid-October to cut prices on more than 100 holiday toys, which the company said is already resulting in a “significant lift in unit volume.”