Southeastern Grocers Eyes a Public Spinoff

IPO could provide exit strategy following lengthy turnaround
Photograph courtesy of Southeastern Grocers

Southeastern Grocers may try going public again.

The Jacksonville, Fla.-based parent of the Winn-Dixie and Fresco Y Mas chains said this week it had confidentially filed a S-1 stock registration form with the Securities and Exchange Commission that is said to be related to “a potential initial public offering of its common stock.”

Southeastern said the filing, which was not made public, “will help enable the company to make the decision to become publicly traded, subject to market and other conditions.”

Typically, a confidential filing can be shared with certain institutional investors and can help a company asses the market appetite for a public offering of shares.

Southeastern last attempted a public offering in 2013 but withdrew the plan a year later, opting instead to embark on a five-year transformation plan that is now nearing its final stretch. That program included a comprehensive review of its stores, dozens of remodels, the introduction of the Hispanic-focused Fresco banner, and most recently the decision to divest the South Carolina based Bi-Lo chain, which Southeastern Grocers plans to shut down by early next year and is currently in the process of selling.

Along the way Southeastern completed a brief stay in Chapter 11 bankruptcy protection, under which it completed a recapitalization. Southeastern was formed in 2010 when Bi-Lo LLC acquired Winn-Dixie in a merger of two southern chains that had each been through previous bankruptcies. It has been privately held for years.

Southeastern has also devoted energy to revamping its pricing and private labels, investing behind digital capabilities, and addressing its culture, officials say.

The transformation resulted in a credit upgrade for Southeastern’s parent Bi-Lo LLC group from the rating agency Moody’s earlier this year.

“Bi-Lo has improved operating performance in the last year with positive same-store sales growth despite a price competitive environment, and we expect credit metrics to continue to improve in the next 12-18 months,” Moody's VP Mickey Chadha stated. “We also expect sales volume and profitability to get an uplift this quarter due to pantry loading during the coronavirus related disruption.”

Earlier this year, Albertsons Cos. was able to successfully launch an IPO after a long wait in part on the strength of improved performance that came with the pandemic.


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