| Company: | Winn-Dixie Stores, Inc. |
| Ticker Symbol: | NYSE: WIN |
| Class Period: | October 9, 2002 to January 30, 2004 |
| Court: | Middle District, FL |
| Date Filed: | Feb-04-04 |
| Lead Plaintiff Deadline: | Apr-05-04 |
| Allegations: |
A securities class action lawsuit was commenced in the Middle District of Florida on behalf of all persons who acquired securities of Winn-Dixie Stores, Inc. (NYSE: WIN) ("Winn-Dixie" or the "Company") between October 9, 2002 and January 30, 2004, inclusive (the "Class Period"). The Complaint names as defendants Winn-Dixie, Frank Lazaran, Allen R. Rowland, and Richard P. McCook (collectively, the "Individual Defendants").
Throughout the Class Period, Defendants portrayed Winn-Dixie, a public company whose chief asset is its large supermarket chain serving Florida, Alabama, Georgia, and several other southeastern states, as a growing and competitive company. In fact, just the opposite was true.
Throughout the Class Period, Winn-Dixie was suffering from substantial undisclosed long-term business and financial problems. The Company was unable to market its Winn-Dixie brand competitively, it was unable to reduce excess expenses when needed, it recorded the carrying value of its long-lived assets at inflated levels, and maintained insufficient reserves for self-insurance. In addition, Winn-Dixie had no credible or workable marketing plan in place which would allow it to compete effectively with other large supermarket chains and discounters, such as Publix and Costco.
Nevertheless, throughout the Class Period, defendant Allen Rowland ("Rowland") and later defendant Frank Lazaran ("Lazaran"), Rowland's successor as CEO, continued to tell investors that Winn-Dixie was following through on its strategic marketing plan. As evidence of its success and financial health, Winn-Dixie declared cash dividends throughout the Class Period.
Approximately mid-way through the Class Period, in June 2003, Rowland stepped down as CEO and received $7.7 million in severance pay, supposedly for improving store operations and enhancing the Company's financial condition. When Lazaran replaced him, unbeknownst to the investing public, Lazaran ordered his senior management to conduct a "comprehensive review" of Winn-Dixie's "entire business model." Even while this plan to restructure the Company's business model was underway, Winn-Dixie and Lazaran continued to tell the public that the Company was successfully executing its sales and marketing plan, with declared dividends to prove it. The Company's stock price rose throughout the Class Period on this encouraging news.
On January 30, 2004, before the opening of trading, Winn-Dixie and Lazaran lowered the boom. In a press release that day, Lazaran stunned the public with disastrous financial results for the Company's second fiscal quarter ended January 7, 2004. The Company's sales were down over a quarter of a billion dollars from the prior year period. The Company had sustained a loss of $79.5 million, or $0.57 per share. Employing understatement, Lazaran told the public: "[W]e recognize that we cannot continue down this path."
The Company also announced that it would take a "series of major actions" to change the way the Company does business, including, brand positioning for its Winn-Dixie brand, $100 million in expense reduction by July 1, 2004, in-depth analysis of the Company's core markets, market share, and competitive positioning, an "image makeover program," and an initiative to "reengineer" organizational effectiveness and accountability. In addition, the Company announced that it would recognize a $36.4 million charge to earnings for impairment to its long-lived assets, namely, its store locations, and would add $21.4 million to its reserves for self-insurance expense, which included additional reserves for workers' compensation claims. The Company also cut its dividend indefinitely.
The market reacted swiftly to the news. Winn-Dixie's stock plunged from $9.09 to $6.56 per share on volume of 24.6 million shares.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
Throughout the Class Period, Defendants portrayed Winn-Dixie, a public company whose chief asset is its large supermarket chain serving Florida, Alabama, Georgia, and several other southeastern states, as a growing and competitive company. In fact, just the opposite was true.
Throughout the Class Period, Winn-Dixie was suffering from substantial undisclosed long-term business and financial problems. The Company was unable to market its Winn-Dixie brand competitively, it was unable to reduce excess expenses when needed, it recorded the carrying value of its long-lived assets at inflated levels, and maintained insufficient reserves for self-insurance. In addition, Winn-Dixie had no credible or workable marketing plan in place which would allow it to compete effectively with other large supermarket chains and discounters, such as Publix and Costco.
Nevertheless, throughout the Class Period, defendant Allen Rowland ("Rowland") and later defendant Frank Lazaran ("Lazaran"), Rowland's successor as CEO, continued to tell investors that Winn-Dixie was following through on its strategic marketing plan. As evidence of its success and financial health, Winn-Dixie declared cash dividends throughout the Class Period.
Approximately mid-way through the Class Period, in June 2003, Rowland stepped down as CEO and received $7.7 million in severance pay, supposedly for improving store operations and enhancing the Company's financial condition. When Lazaran replaced him, unbeknownst to the investing public, Lazaran ordered his senior management to conduct a "comprehensive review" of Winn-Dixie's "entire business model." Even while this plan to restructure the Company's business model was underway, Winn-Dixie and Lazaran continued to tell the public that the Company was successfully executing its sales and marketing plan, with declared dividends to prove it. The Company's stock price rose throughout the Class Period on this encouraging news.
On January 30, 2004, before the opening of trading, Winn-Dixie and Lazaran lowered the boom. In a press release that day, Lazaran stunned the public with disastrous financial results for the Company's second fiscal quarter ended January 7, 2004. The Company's sales were down over a quarter of a billion dollars from the prior year period. The Company had sustained a loss of $79.5 million, or $0.57 per share. Employing understatement, Lazaran told the public: "[W]e recognize that we cannot continue down this path."
The Company also announced that it would take a "series of major actions" to change the way the Company does business, including, brand positioning for its Winn-Dixie brand, $100 million in expense reduction by July 1, 2004, in-depth analysis of the Company's core markets, market share, and competitive positioning, an "image makeover program," and an initiative to "reengineer" organizational effectiveness and accountability. In addition, the Company announced that it would recognize a $36.4 million charge to earnings for impairment to its long-lived assets, namely, its store locations, and would add $21.4 million to its reserves for self-insurance expense, which included additional reserves for workers' compensation claims. The Company also cut its dividend indefinitely.
The market reacted swiftly to the news. Winn-Dixie's stock plunged from $9.09 to $6.56 per share on volume of 24.6 million shares.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
If you feel you qualify for damages or remedies that might be awarded in this class action please fill in our form on the right to submit your complaint.
If your injustice does not match the complaint described above, please use this form to register your complaint. Thank you.
