Southeastern Grocers One Step Closer to Going Public

Southeastern Grocers, the Jacksonville, Fla.-based owner of Winn-Dixie and Fresco supermarkets filed its S1 for an initial public offering on Oct. 19. In its filing with the U.S. Securities Exchange Commission, it listed a proposed maximum aggregate offering price of $100 million, which is expected to change. It intends to trade under the symbol SEGR on the New York Stock Exchange.

This appears to be the latest step in the grocers’ “transformation” from bankruptcy in 2018 to financial restructuring to selling off more than 120 of its Carolinas-based Bi-Lo chain and Harveys banners to a COVID-accelerated comeback.

“I’m proud to tell you that our transformation has continued in earnest,” SEG CEO Anthony Hucker told WGB in an exclusive trade interview earlier this month. Hucker, who was named CEO of the grocery chain in 2017, was charged with establishing a transformation plan to better position SEG for sustainable growth in the future.

In its filing, SEG elaborates on its recent successes and what it sees as its newfound position of strength, as well as areas on which it intends to focus moving forward, including driving fresh sales, store renovation and expansion, investment in digital, cost reductions, and a focus on local products.

“We believe the impact of the…COVID-19 global pandemic has enabled us to solidify our competitive positioning, enhance our value proposition and connect us more closely with our customers,” wrote SEG in its filing.

Its “Company Overview” proffered in the filing further provides a peek under the hood of the Winn-Dixie parent, including the revelation that after further streamlining, Winn-Dixie stores will account for about 87% of its remaining portfolio.

According to the filing, SEG had sales of $5.3 billion, and a positive net income of $205.7 million in the first 28 weeks of this fiscal year, indicating modest earnings improvement. While the grocer is still turning a net loss, it has done quite well in the pandemic when compared to fiscal year 2019 (ended Dec. 25, 2019), which saw sales of $8.77 billion and a net loss of $116.2 million.

Southeastern Grocers operates 420 stores under the Winn-Dixie, Harveys and Fresco y Mas banners throughout Florida, Georgia, Alabama, Louisiana and Mississippi. Additionally, it operates 140 liquor stores, 231 in-store pharmacies and one centralized specialty pharmacy. According to the filing, while it operates its business as a single unit with a single management team, it executes its go-to-market strategy through its three banners of “distinct heritages.”

In the filing, the grocer with a more than 95-year history, attributes its loyalty program—which boasts more than seven million active customers—to the generation of more than 85% (excluding pharmacy sales) of its net sales and approximately 75% of all transactions in fiscal 2019. Looking ahead, SEG believes its robust loyalty program provides an advantage against competitors who do not have established loyalty programs and customer-specific shopping data.