JACKSON – There’ll be no more jingle in the pockets of Jitney.
After 80 years of business, the one-time icon among Mississippi companies announced last week that it would sell its assets and dissolve the company.
Jitney Jungle Stores of America Inc., which operates 137 grocery stores, 42 gas stations and nine liquor stores, sold 106 properties, to Jacksonville, Fla.-based
Winn-Dixie Stores Inc. for $85 million. Birmingham-based Bruno’s Supermarkets Inc. will pick up 22 properties for $9 million. Neither transaction includes inventory
The sales, which should be completed in January, are subject to bankruptcy court and governmental approvals, but no resistance is expected.
“These transactions represent a significant step in the resolution of Jitney Jungle’s bankruptcy,” said Ronald E. Johnson, president and CEO of Jitney. “We have
greatly improved the operations while operating under Chapter 11 and believe that Winn-Dixie and Bruno’s will receive significant value from the Jitney Jungle and
The remaining properties – 48 grocery stores, eight gas stations, four liquor stores and a distribution center – will likely be sold to smaller independents by the end
of the year, said Barbara Mitchell, assistant to Jitney president and CEO Ron Johnson.
“The corporate office will be closed,” she said. “Lots of people will be looking for jobs, including me.”
Both Winn-Dixie and Bruno’s officials have agreed to interview Jitney employees at the stores that will be acquired.
News of the sales ended months of speculation about what would happen to the beleaguered grocery store chain. Jitney has been operating as a debtor-in-possession
under Chapter 11 of the United States Bankruptcy Code since Oct. 12, 1999. Following the bankruptcy filing, the reorganization plan called for selling or closing
between 40 and 55 stores immediately, with the stores in Jitney Jungle’s core market – Mississippi – to remain virtually unaffected.
Earlier this year, Johnson anticipated that the company would wind up with approximately 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. New York-based Bruckmann, Rosser, Sherill & Co., which owns 84% of
Jitney, acquired interest from the McCarty-Holman family in 1986.
Jitney was founded by Jackson natives William Henry Holman, Judson McCarty Holman and William Bonner McCarty in 1912 and opened its first store April
19,1919 on East Capitol Street.
“Since Jitney has been cutting back on inventory, parking lot maintenance, store upkeep, et cetera, I think most of the communities are viewing the news positively,”
said Bob Wilson, director of program services for the Mississippi Main Street Association. “Some of the smaller communities that survived the last round of closures
have already been trying to recruit new stores.”
Many analysts said Jitney’s options had run out. Because recent mergers by Albertson’s and Kroger kept the grocery giants busy, they were not expected to acquire
Jitney. Safeway, a West Coast-based grocery chain, had been rumored to be in the acquisition mode, but nothing panned out. Jitney once stated that it hoped to
complete an IPO in 1999, but was unable to overcome competitive pressures and credit limitations to finance its working capital requirements.
“We keep seeing consolidation in the supermarket industry,” Tom Agan of the Atlanta-based retail-consulting firm Kurt Salmon Associates, has said. To remain
competitive and cut costs, the chains “just keep getting bigger and bigger.”
Others have breathed a sign of relief. Last month, after Atlanta-based IRT Property Company (NYSE: IRT) announced an increase in net earnings for the nine months
ended Sept. 30, 2000, chairman and CEO Thomas H. McAuley remarked, “We have … been successful to date in replacing most of the former Jitney Jungle
locations with new national retailers that should enhance the value and growth potential of those particular properties.”
In the Winn-Dixie deal, Jitney’s 72 grocery stores, 32 fuel centers and two liquor stores, primarily in Mississippi, with a concentration in metro Jackson, will become
part of one of the nation’s largest supermarket retailers. Winn-Dixie has more than 1,000 stores in 14 states, mainly in the south, including about 450 in Florida.
Revenue from the acquired stores is expected to generate approximately $650 million in annual sales.
“This acquisition is a very good strategic fit for Winn-Dixie,” said Allen R. Rowland, Winn-Dixie president and CEO. “These stores will give us good market share in a
new geographic area.”
Despite its apparent strength in numbers of stores, many industry analysts view Winn-Dixie as distressed, primarily because it has been trying to streamline its own
operations. In June, the food giant tried to sell its Texas and Oklahoma operations to Kroger but was blocked by the Federal Trade Commission. In 1986, Jitney
purchased six Winn-Dixie stores in Jackson, Vicksburg and Hattiesburg as the company pulled out of most of the state.
Bruno’s has had it own worries. Suffering from sagging sales and stiff competition, the company, now owned by its creditors, operated under Chapter 11 bankruptcy
protection until Jan. 27 and emerged significantly downsized.
“This acquisition will enable us to strengthen our business and achieve economies of scale in our core markets,” said James A. Demme, president and CEO of
Both companies face stiff competition from Wal-Mart (NYSE: WMT), the world’s largest retailer. With 4,000 stores – bigger than Sears, K-Mart and J.C. Penney
combined – analysts attributed Jitney’s demise partly to being “slammed by Wal-Marts.”
“It will be interesting to see if any of the big chains develop more smaller concept stores to deal with residential migration back to downtown and Internet
grocery/delivery services,” Wilson said.
Contact MBJ contributing writer Lynne Wilbanks Jeter at email@example.com.
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