Bi-Lo parent pulls plan for public offering

08/23/2014 12:17 AM

08/23/2014 12:20 AM

The Florida-based company that operated under the BI-LO and Winn-Dixie supermarket brands has withdrawn plans for a public stock offering, reversing its intent to raise up to $500 million, according to a filing with the U.S. Securities and Exchange Commission.

Southeastern Grocers LLC in its filing gave no reason for the withdrawal, saying only “the company has determined not to pursue the contemplated public offering at this time.”

SEC officials hadn’t declared the company’s registration statement effective under the Securities Act of 1933 and no securities were sold in connection with the contemplated offering, according to Brian Carney, identified in the filing as Southeastern’s executive vice president and chief financial officer.

It wasn’t known how withdrawal of the initial public offering could affect BI-LO’s operations in the Southeast, including South Carolina.

Carney couldn’t be reached for comment Friday. A spokesperson said the company won’t comment on matters such as withdrawal of the IPO.

SEC filings show Southeastern was created in February 2010 in connection with BI-LO’s reorganization under Chapter 11 of the U.S. Bankruptcy Code. Carney was BI-LO’s chief financial officer when the grocer was based in Mauldin.

The headquarters was transferred to Jacksonville, Florida, after BI-LO merged with Winn-Dixie.

While the registration statement with the SEC was filed last November under Southeastern Grocers, the company’s name remains Bi-Lo. Holdings, of which BI-LO, Harveys and Winn-Dixie are subsidiaries, a spokesperson said.

In the statement, company officials said, “We believe aggressive government promotions and incentives for businesses are driving industrial growth in the Southeast. We believe that state governments across the region, seeking to create jobs for their residents, are offering attractive tax incentives for businesses that build in or relocate to these states.”

Further, the officials said, “We believe the Southeast also offers an attractive labor market for us, with lower average wage rates than the national average and a generally non-union work force.”

But the officials also acknowledged the competitive landscape in the Southeast was well established, “with relative saturation of supercenters such as Walmart, and dollar stores such as Dollar General, Dollar Tree and Family Dollar.”

“We believe it is likely that we will be confronted with fewer new store openings by these formats in the future, compared to the rest of the U.S.,” company officials said.

“Additionally, we believe we have developed an effective strategy and shopping experience to compete with these formats, as evidenced by our consistent positive pro forma comparable store sales growth over the past several years.”

The officials said they believed the company could continue to grow its profitability “by reducing costs, leveraging our fixed cost base and improving comparable store sales through our merchandising programs.”

“We plan to continue reducing operating expenses in ways that do not negatively impact our customers’ shopping experience, while investing in programs that increase customer loyalty and drive top-line sales growth,” company officials said.

“Such cost reduction initiatives include inventory shrinkage reduction programs, sourcing initiatives, store process improvements, and general and administrative expense reductions.”

In its registration statement, Southeastern said for the fiscal year ended Dec. 26, 2012, the company generated approximately $8.5 billion of net sales and approximately $103.1 million of net income, including about $7.6 million of tax expense.

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