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Winn-Dixie gobbles up Mississippi grocery
By MARK ALBRIGHT © St. Petersburg Times, published October 31, 2000 Even as it struggles to slash costs and resuscitate profits, Winn-Dixie Stores Inc. couldn't pass up a chance to buy most of a Mississippi-based supermarket chain at a bargain price. The nation's sixth-largest grocer Monday said it will pay $85-million in cash for 72 Jitney-Jungle grocery stores, 32 filling stations and two liquor stores in Mississippi, Alabama, Louisiana and the Florida Panhandle. The purchase puts Winn-Dixie in some new markets such as Jackson, Miss., where hometown Jitney-Jungle holds 44 percent of the business. The acquisition comes just months after Winn-Dixie closed 114 unprofitable stores and its Tampa warehouse and eliminated 11,000 jobs. The chain also tried to pull out of Texas and Oklahoma before a deal to sell its stores there was denied earlier this year by antitrust regulators. Winn-Dixie has a big presence in Louisiana and Alabama but little in Mississippi north of the Gulf Coast. "We've said all along we want to concentrate on our core markets" in the Southeast, said Mickey Clerc, spokesman for Jacksonville-based Winn-Dixie. Winn-Dixie is getting the Jitney-Jungle stores at a steep discount. By one measure, a retail company's worth is roughly equal to the value of its annual sales. With annual sales of $650-million, the Jitney-Jungle stores would be worth more than six times what Winn-Dixie is paying for them. The sale is just part of the carving up of an 81-year-old regional chain that has been in Chapter 11 bankruptcy for the past year. Birmingham, Ala.-based Bruno's Supermarkets Inc. agreed to buy 17 other Jitney-Jungle stores. Jitney-Jungle has struggled for a decade under a huge debt load while competitors such as Wal-Mart, Kroger and Albertson's Inc. marched into Mississippi, a market long dominated by Jitney-Jungle, the former Delchamps and a slew of small independents. "It's surprising that Winn-Dixie has been in retrenchment mode, then they go out and buy more stores," said Chuck Gilmer, editor of the Shelby Report of the Southeast, a Gainesville, Ga., trade magazine. "But this really does fill in a big hole for them." Winn-Dixie plans to operate the stores under the Jitney-Jungle name except along the Gulf Coast and hire "substantially all" 5,600 employees. The acquisition still must be approved by a federal bankruptcy judge and antitrust regulators. Winn-Dixie shares closed Monday at $19.44, up 88 cents.
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From the Times Business report
From the AP
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