(Feb. 28) A year into Chapter 11 bankruptcy protection, retail grocery chain Winn-Dixie Stores Inc. said it was adding 36 stores to the roster of 326 units it was either closing or selling.

The Jacksonville, Fla.-based company said Feb. 28 unloading more stores than it had planned earlier would further strengthen its finances and accelerate its plan to return to profitability.

Winn-Dixie said it wants to sell as many of the stores as possible but would close any it couldn’t sell.

PAIR OF REASONS

The decision to increase the number of stores on the block likely is fueled two ways, said Neil Stern, partner in Chicago-based retail consultant McMillan/Doolittle LLP.

“Part of their plan clearly is, you want to get rid of money-losing stores,” Stern said. “The second thing is you want to consolidate the base, so you’ll be more strong regionally.”

Counting the 36 additional stores it plans to sell or close, Winn-Dixie operates 585 stores in Florida, Alabama, Georgia, Louisiana, Mississippi and the Bahamas.

The company filed for Chapter 11 protection from creditors Feb. 21, 2005, having lost market share to such competitors as Bentonville, Ark.-based Wal-Mart Stores Inc. and Lakeland, Fla.-based Publix Super Markets Inc.

“We believe the 550 stores in our continuing footprint will provide us with the most solid possible foundation on which to build a more profitable future for Winn-Dixie,” Peter Lynch, Winn-Dixie’s president and chief executive officer, said in a news release.

Winn-Dixie brought in Lynch, a former executive with Boise, Idaho-based retailer Albertsons Inc., in December 2004 to oversee a company overhaul that Winn-Dixie had been undergoing since the previous spring.

On Feb. 10, the company said it had awarded Lynch a $1.5 million bonus, provided he remains in his job at least through Aug. 31.

FOUR STATE PULLOUT

Last June, Winn-Dixie announced it was closing 326 of its 913 stores — 35% of its units — and pulling out of four states in order to concentrate on the core markets in which it has operated for most of its 80-year history.

But the company also warned that it would be cutting back even in its core markets.

“I assume that they went through the details of their stores and continuing performance of the stores, they found more stores that didn’t meet their criteria,” Stern said. “Ultimately, it’s the right time to do this. If you’re going to close stores, you want to do it when you’re in bankruptcy. It’s a lot easier to get it done.”

No other closures are planned, and the company will, where possible, offer employees affected by closures positions at nearby stores, Lynch said.

Winn-Dixie said in December it plans to emerge from Chapter 11 protection in June.