JACKSON, Miss. -- Jitney-Jungle Stores of America here has unveiled specific projects for the first year of its two-year $50 million capital agenda, including plans to remerchandise most of its combination stores to conform with its new strategy of concentrating on more basic merchandising.
Ron Johnson, chairman and chief executive officer, told SN the company expects to spend approximately $25 million in 2000 to open one new store, do 34 remodelings and 16 store remerchandisings and open 20 to 25 gas stations -- an agenda likely to be duplicated in 2001, he added.
Jitney's capital spending plans will be more diversified in the next two years than they were in prior years, Johnson said, when a majority of capital was spent on opening combination stores -- a change in emphasis that followed Johnson's promotion to chairman and CEO in June following the resignation of Michael E. Julian.
Johnson said Jitney's new approach involves de-emphasizing the upscale nature and product selection of its urban-based combos to refocus its efforts on more basic merchandising at all stores.
According to Johnson, the single new Jitney Premier, scheduled to open in Memphis, Tenn., in the first quarter of 2000 -- which was begun before he took over -- will reflect the company's modified merchandising approach. "It will still be a combo, but it won't be an upscale combo," he said.
Instead, the store will offer 300 varieties of produce instead of 500; concentrate on basic hot foods like fried chicken while limiting offerings of value-added meals-to-go and sandwiches, and eliminate scratch bakeries in favor of bakeoffs -- "all things the consumer won't really notice but that have a very favorable impact on profitability from an operating standpoint," he explained.
Jitney operates 23 Jitney Premier combination stores, mostly in urban markets.
All 16 of the stores set to be remerchandised next year are combination stores that will be modified along the lines of the Memphis model, Johnson added. He said the seven remaining Premier stores are already "close to what we will do with the others."
Johnson said funding for the capital projects will come from the sale of non-core assets.
Jitney has already sold its corporate jet for an undisclosed price, he said, and has signed a contract with a non-industry buyer for its 635,000-square-foot distribution center in Hammonds, La., in a deal that will close in 45 days.
He said he hopes to sell an undisclosed number of stores before the end of the year.
In selecting the 34 stores for remodeling, Johnson said, Jitney will concentrate on locations "where we can get the biggest bang for our buck the quickest."
He said Jitney has identified sites for 41 gas stations, "and we'll open 20 to 25 this year and a like number in 2001."
Gas stations "do quite well in all markets," he added. "They are very profitable, and they become cash-positive right out of the blocks."