JACKSONVILLE, Fla. — Winn-Dixie Stores here confirmed last week that longtime supermarket-industry veteran Randall Onstead will take over as president and chief executive officer of Bi-Lo and Winn-Dixie after the two companies complete their planned merger in the coming weeks.
Peter Lynch, the former Albertsons president who led Winn-Dixie through successful bankruptcy reorganization, said he plans to resign when the merger is completed.
In a letter to Winn-Dixie employees filed with the Securities and Exchange Commission, Onstead, the chairman of Bi-Lo, said he had already toured several Winn-Dixie stores and was visiting Winn-Dixie’s headquarters, regional offices and distribution centers last week.
“Winn-Dixie is an industry-leading company with deep roots in the communities and neighborhoods that it serves,” Onstead said in the letter. “I am eager and enthusiastic about working with the entire Winn-Dixie team so that, together, we can grow these two great companies to achieve even greater success together.”
As previously reported, Winn-Dixie has agreed to be acquired by Bi-Lo for $9.50 per share, or about $560 million. The two companies would operate a network of about 690 stores in 10 Southeastern states, with annual sales of about $10 billion.
Onstead’s extensive industry experience includes a long stint at the Randalls chain in Texas, which was founded by his father and which he ran as chairman, president and CEO from 1996 to 1999, until the chain was acquired by Pleasanton, Calif.-based Safeway. He later ran Safeway’s Dominick’s Finer Foods division in Chicago before joining Bi-Lo’s board in 1998.
His career at Randalls included coping with the aftermath of acquisition and integration — Houston-based Randall’s had acquired the Tom Thumb chain in Dallas shortly before he became CEO — as well as working with private-equity investors, when Randalls turned to Kohlberg, Kravis Roberts for financial assistance in the wake of that acquisition.
Bi-Lo and Winn-Dixie said they planned to make more announcements about the management structure of the combined company as the merger nears completion, but sources told SN they expect Michael Byars, the current CEO of Bi-Lo, to remain.
In his letter to Winn-Dixie staff, Onstead noted that he was meeting with Lynch; Larry Appel, senior vice president of retail operations at Winn-Dixie; and Chris Scott, group vice president of logistics and distribution at Winn-Dixie.
Burt Flickinger, managing director, Strategic Resource Group, New York, said Lynch has developed a strong team at Winn-Dixie.
“Winn-Dixie’s people have proven themselves through the bankruptcy and since the company emerged from bankruptcy as capable operators and merchants,” he told SN.
Lynch said he plans to stay as on as an advisor temporarily.
“Having had the privilege to serve as Winn-Dixie’s CEO for the last seven years, it is now time for me to seek new challenges,” Lynch said in his own letter to employees.
Lynch had joined Winn-Dixie in 2004 following a 30-year industry career that included about five years as president and chief operating officer of Albertsons.