business news in context, analysis with attitude

• The Ithaca Journal reports this morning that the late Robert Wegman left most of his estate to The Wegman Family Charitable Foundation, which “focuses on projects that support young people and education,” causes that he nurtured long before his recent death. The gift to the foundation, according to company spokesman Jo Natale, was “in the spirit of the way he lived.”

• The Flint Journal reports that in Grand Blanc, Michigan, Kroger is spending $5 million to upgrade an existing store, expanding it by 20,000 square feet and adding “a Starbucks coffee shop, an olive bar, a soup bar, expanded wine selection, bigger international foods aisles” and a Nature's Market Department, a selection of specialty and organic foods.

• Published reports say that Nestlé plans to acquire weight loss company Jenny Craig for about $600 million (US).

The stories all note that Jenny Craig has turned its business around using a television campaign featuring actress Kirstie Alley and chronicling her weight loss using the Jenny Craig system. While Nestlé has not been in the weight loss business until now, it has been placing big bets on the functional food industry, and it likely sees this acquisition as fitting into that portfolio of products.

• Winn-Dixie reportedly expects to finally file a reorganization plan by the end of the month that will allow the company to emerge from bankruptcy protection by October 2006.

The June 29 deadline for the reorganization plan to be filed represents the fifth extension requested by the company as it wrestled with how to deal with unsecured claims made by a number of creditors.
KC's View:
Getting out of bankruptcy is one thing, but we want to see how Winn-Dixie creates a more compelling and competitive shopping experience that will lure shoppers in the front door. Selling off and closing stores will only take Winn-Dixie so far – it needs a strategy that will allow it to build sales and profits in a meaningful and sustainable way.

We remain skeptical, but open-minded. We are willing to be proven wrong.