JACKSON – A year after filing for bankruptcy protection, Jitney Jungle Stores of America has quietly continued its reorganization efforts while closing more stores
than initially intended.
Last month, Jitney Jungle shut down its Delchamps store on the I-10 Service Road in New Orleans, saying it was unprofitable. Louisiana stores in Houma, Slidell,
Denham Springs, Gonzalez and Baton Rouge were closed earlier this year. So were several Alabama stores in the Birmingham, Tuscaloosa and Mobile markets.
As of press time, Jitney Jungle was operating 138 supermarkets, 43 gas stations and 10 liquor stores in Florida, Alabama, Mississippi and Louisiana, according to a
Earlier this year, Jitney Jungle president and CEO Ronald E. Johnson anticipated that the company would wind up with 140 to 150 neighborhood stores with
approximately $1.4 billion in annual sales, with plans to remodel 34 stores in Mississippi as the company’s cash position improves. Bruckmann, Rosser, Sherill & Co.
owns 84% of Jitney-Jungle, which was founded in 1919.
“Our plans are to emerge from bankruptcy by the end of the year without debt and with a financial structure in place that would enable this company to move
forward,” Johnson said in February.
Recent calls to Johnson were not returned for this story.
When Jitney Jungle filed for Chapter 11 bankruptcy protection on Oct. 12, 1999, the company was operating nearly 200 stores, including conventional stores such as
Jitney Jungle and Delchamps, food-and-drug combination stores such as Jitney Premier and Delchamps Premier and discount stores, such as Sack & Save, 55 gas
stations and 10 liquor stores. Company officials cited reasons for filing for bankruptcy protection as integration challenges associated with the acquisition of Delchamps
“Our objective is to use the reorganization process on a fast-track basis to create a more manageable capital structure and strengthen our business operations so that
Jitney Jungle can significantly enhance its profitability,” said Johnson when the bankruptcy protection process began. “With court protection under Chapter 11, Jitney
Jungle has the breathing room it needs to restructure its debt and complete its transition into a stronger company.”
The business plan called for selling or closing between 40 and 55 stores immediately, with the stores in Jitney Jungle’s core market – Mississippi – to remain
Analysts say Jitney Jungle has been “slammed by Wal-Marts.”
“There is a lot of competition,” Johnson has said. “In the last three years, 7.7 million square feet of retail center space has remained steady, but there’s eight million
square feet of additional competition. From a square footage standpoint, it’s like an additional 200 stores. That changes the dynamics dramatically.”
Nancy Lottridge Anderson, CFA, a financial analyst and president of New Perspectives Inc. in Clinton, said she was a faithful Jitney shopper until recently.
“As a shopper, I have abandoned them. As an investor, I wouldn’t even consider them,” she said. “Recently, I decided to try them again. It was Saturday afternoon
– high shopping time – and I wanted to buy a beef roast. They didn’t have any! I almost put the other few items I had gathered back, but I decided to proceed to
the checkout. There were only a few cashiers at the front and they were incredibly slow and inept. I left swearing to never darken the doors again.”
They are in a precarious position, and they have done little to reassure their customers. The competition is eating their lunch on prices, services, and inventory. Their
employees are dwindling. My question is, can they stay afloat much longer? Even with the best of managers, this situation appears dire.”
Jitney’s woes continue to spread. Last month, Standard & Poor affirmed its triple-B-minus rating on Atlanta-based IRT Property Co., saying it was hampered by
anchor vacancies due to Chapter 11 bankruptcy filings of Jitney-Jungle Stores, Service Merchandise, and Bruno’s Supermarkets, which account for less than 4% of
the portfolio’s square footage and revenues.
In August, New Orleans-based Sizeler Property Investors Inc. (NYSE: SIZ), an equity real estate investment trust, which invests in income-producing retail shopping
centers and apartment properties in the southern U.S., cited costs associated with certain tenant financial difficulties, in particular Jitney Jungle, for diminished second
quarter FFO results.
Johnson has predicted that a year or two after the company emerged from bankruptcy and stabilized, equity holders would likely seek to sell the company.
“At that point, I think Jitney will become a division of a much larger corporation,” Johnson said. “Where the future of Jitney goes from there is sketchy.”
Contact MBJ contributing writer Lynne Wilbanks Jeter at email@example.com or (601) 853-3967.
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