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Columbia Business Monthly

BI-LO Transformation Continues

By David Dykes

Southeastern Grocers Inc., parent company of BI-LO, Fresco y Más, Harveys Supermarket and Winn-Dixie stores, announced last month a series of transactions it said ensures the company continues to thrive and support the long-term growth of its core banners.

But one move looms as troubling for the grocery store chain founded in 1961 by Frank Outlaw and once headquartered in Mauldin, S.C.

A spokesperson for Jacksonville, Fla.-based SEG said the company made the strategic decision to no longer operate stores under the BI-LO banner to allow for greater investment in growing the Fresco y Más, Harveys Supermarket and Winn-Dixie banners.

To further that goal, SEG said it agreed to sell 62 stores, including 46 BI-LO and 16 Harveys Supermarkets, to Food Lion, a subsidiary of Ahold Delhaize, and was actively exploring strategic options for the remaining BI-LO stores, including other potential transactions.

Asked what that could mean, the SEG spokesperson said in an email, “Southeastern Grocers is not closing any store locations as part of the transaction with Food Lion. Following the successful completion of the Food Lion transaction, Southeastern Grocers will pursue strategic options, including potential transactions, for the remaining (61) BI-LO stores.

“In the interim, they will remain open and continue to operate normally. We are very early in this process and we do not have any further details to share at this time regarding these stores. Once a decision has been made, every reasonable effort will be made to ensure a smooth transition for our associates, customers and communities. As additional details are confirmed, we will continue to clearly communicate this information to the community.”

Asked if there is a timetable, the spokesperson said, “BI-LO stores will continue to operate under the SEG umbrella until early 2021. As previously stated, we are very early in this process and we do not have any further details to share at this time regarding these stores. In the interim, all BI-LO stores are operating normally.”

It’s been a long road in recent years for BI-LO and its employees.

In 2010, most BI-LO stores were expected to remain open, and most of the company’s 15,000 workers would keep their jobs, under a reorganization plan approved by a federal bankruptcy judge, according to The Greenville News.

The newspaper reported the plan envisioned a much leaner and financially stronger company to compete in the intensely competitive grocery business across four Southeastern states.
According to court filings cited by the newspaper, BI-LO operated 214 stores under leases and maintained three leases related to its South Carolina headquarters. BI-LO said its projections called for 207 stores coming out of bankruptcy proceedings.

Then, in 2018, Southeastern Grocers announced that it had successfully completed its financial restructuring and emerged from Chapter 11 in record timing.

Through the process, SEG said it transformed its financial profile and established a strengthened balance sheet by decreasing overall debt levels by approximately $600 million (including $522 million of debt exchanged for equity in the reorganized company) while maintaining the company’s strong liquidity position.

“It is an exciting new day for Southeastern Grocers as we emerge a stronger company with an optimal store footprint that is well-positioned to thrive in the competitive retail market,” Anthony Hucker, SEG’s president and chief executive officer, said at the time. “Our number one focus is serving our associates and customers, and providing our communities with a shopping experience they can count on.”

Separately last month, SEG said it was divesting the assets of 57 of the in-store pharmacies it operates under the BI-LO and Harveys Supermarket banners to CVS and Walgreens.

A sign recently in the drive-through window at an eastside Greenville BI-LO indicated the prescription department was closed, and the pharmacy wouldn’t reopen.

It was a troubling sight for customers who’ve relied for years on a professional, courteous and efficient group of pharmacists to fill prescriptions and answer questions about a variety of conditions.

Those customers have been told two years of their records were being transferred to a nearby CVS, and June 16 would be the last day to pick up prescriptions at BI-LO.

And presumably, BI-LO pharmacists are looking for jobs.  

“Consistent with our culture and values, any associates who are affected by this decision will be treated with the utmost care and respect, and will receive the appropriate support throughout this transition,” the SEG spokesperson said. “We are actively collaborating and coordinating with CVS and Walgreens in the interviewing and potential hiring of associates from acquired pharmacies.”

In 1961, according to Wikipedia historical accounts, Outlaw, a former Winn-Dixie executive, bought four Greenville, S.C., grocery stores from the chain Wrenn and Syracuse, to create the Wrenn & Outlaw chain. The company was officially named BI-LO in 1963 after Outlaw conducted an employee store-naming contest to develop the “brand.”

His secretary, Edna Plumblee, won the contest by submitting the name “BI-LO.”

Southeastern Grocers was formed in May of 2015 as the parent company of BI-LO, Harveys Supermarket and Winn-Dixie. In June of 2016, the company created the Fresco y Más banner, bringing the four distinct brands under the Southeastern Grocers’ umbrella.

But it’s long been apparent this isn’t Frank Outlaw’s company anymore.

David Dykes is editor of Greenville Business Magazine, Columbia Business Monthly and
Charleston Business Magazine.