Chattanooga: Bi-Lo plans to keep stores open during bankruptcy

Bi-Lo expects to quickly exit Chapter 11 Bankruptcy, leaving in a stronger position for long-term success, the company’s president said Monday.

“We are a financially strong company and we are approaching this process from a very, very strong position from a liquid standpoint,” said Michael Byars, president and CEO of Bi-Lo.

Bi-Lo does not plan to close any of the region’s 29 stores or lay off any workers during the voluntary restructuring process, Mr. Byars said. Bi-Lo filed for bankruptcy because the tight credit markets prevent the company from refinancing a loan that was coming due this month, he said.

Mr. Byars declined to say how much the loan is worth. It’s too early to know when the company will exit bankruptcy reorganization, he said.

“We went through a good bit of time evaluating the situation ... and determined that this was the best approach for our financial stability moving forward,” Mr. Byars said.

The company will operate using cash on hand and cash from operations, as well as a $100 million loan from GE Capital.

Bi-Lo will continue to invest in its stores and find ways to improve customer service, Mr. Byars said. Bi-Lo has asked the bankruptcy court for permission to continue paying employee salaries and benefits, and expects to continue operating its BonusCard program, according to a company statement.

Publix Super Markets, one of Bi-Lo’s competitors, operates strictly on a cash basis, meaning it has no debt, said Brenda Reid, media and community relations director for Publix. The company is owned by its employees, which provides an incentive to hold costs down, she said.

“We’re in a unique position right now as a retail company in this economy,” Ms. Reid said. “We are debt-free and we operate debt-free.”