Kroger looks at W-D brand, sources say

[bobliocatt]

The Business Journal staff

Winn-Dixie's Chapter 11 filing could provide an opening for the nation's largest grocer to enter Florida.

The 80-year-old Winn-Dixie (Pink Sheets: WNDXQ) has attracted Kroger Co. (NYSE: KR) as a deep-pockets suitor, an industry source and a trade source said.

The Jacksonville-based grocery chain has already closed more than 150 stores, and is expected to close more.

At least 22 additional leased stores in South Florida will be closed, subject to approval of the bankruptcy court, one of the sources said.

After the closings, one source expects Kroger to supply goods and services to Winn-Dixie, followed by an eventual asset buyout or takeover.

The trade source agreed with the initial scenario, but said the final deal is still being negotiated. He expects Kroger to get stores in northern Florida and other states assume $800 million in debt, while Winn-Dixie would survive as a pared-down central and South Florida grocery chain.

The trade source points out that heirs of company founder William Davis still own about 36 percent of the outstanding shares - which closed at 61 cents on Wednesday - and they don't want to see their equity positions wiped out.

A spokesman for Kroger did not return calls seeking comment while a spokeswoman for Winn-Dixie said she would not address rumors.

Kroger, founded in 1883 and based in Cincinnati, operates 3,700 stores in 32 states under brands including Ralphs, Fred Meyer, King Soopers, Food 4 Less, Smith's, Fry's and Dillons.

With revenue of $53.8 billion, it is the largest grocery-only chain in the United States, although Wal-Mart is the largest seller of groceries in the country.

- Ed Duggan

A new palace of fitness on South Beach

Displaced Manhattan socialites and high-powered executives in South Beach soon will be able to sweat it out just like at home.

New York City-based Equinox Fitness Club has a 15-year lease for 25,000 square feet along Collins Avenue, its first location in Florida.

The high-end gym will move this spring into the second floor of the building at 520 Collins Ave.

Equinox is expected to pump up its market share in Miami Beach, offering a chic atmosphere it hopes will lure fitness buffs away from other local health clubs.

"By opening in South Beach, our aim is to meet the needs of a discriminating consumer," Equinox CEO Harvey Spevak said. "Miami is a city where the fashion, music, film and real estate industries converge and Equinox has 13 years of experience catering to this demographic."

Greg Masin, senior director of Cushman & Wakefield's retail service, which brokered the deal, said, "It became clear in marketing the project that there was an opportunity for a quality health and fitness operation."

Equinox will start memberships at $95 a month with no initiation fee, but eventually raise that to $119 a month and a $395 initiation.

Equinox has opened fitness centers in other cities, including San Francisco and Chicago. Offerings at other locations have included a spa, caf

[bobliocatt]

The outcome of this should be interesting. Kroger is definately a good company, but it would be tough to compete with the home grown market, Publix has built. However, there's a lot of money to be made in a rapidly growing state like Florida.

[jandar]

Doesnt make sense. Winn Dixie's Coporate Office is here in Jacksonville. Are they going to move that as well?

[scongro]

This is not the first that I've heard of that. I was talking to someone who works at a Winn-Dixie (My girlfriend babysat him back a while ago), and there was rumors floating around his store that this may happen.

Personally, while I like the move from Kroger's point of view, I don't think it would be good for Jacksonville. I don't know where Kroger is based, but I don't think that they would move their headquarters to Jacksonville, meaning that there would almost certainly be job losses in the area.