JITNEY-JUNGLE GETS CONTROL OF DELCHAMPS

ELLIOT ZWIEBACH

JACKSON, Miss. -- Jitney-Jungle Stores of America here said last week it is now the majority shareholder in Delchamps, Mobile, Ala., controlling 74% of the equity following completion of its cash tender offer.

Jitney said it expects to buy up the remaining stock over the next 60 days.

The deal, which was disclosed in early July, required two-thirds of the outstanding stock to be tendered.

Owners of 5.3 million Delchamps shares, or 74% of the total outstanding, turned over their stock in the tender offer for a price of $30 per share.

Prior to the divestment of 10 stores along the Gulf Coast, the combined entity will operate 223 stores in Alabama, Arkansas, Florida, Louisiana, Mississippi and Tennessee with sales of approximately $2.3 billion, including 105 Jitney stores with sales of $1.2 billion and 118 Delchamps units with sales of $1.1 billion.

According to Michael E. Julian, Jitney's chairman and chief executive officer, Jitney intends to develop a transition plan with Delchamps' staff, until the merger has been completed, then focus on holiday sales during November and December. It expects to implement the transition plan in early January, Julian told SN.

Under that plan, Julian said:

Jitney will sell eight stores in Mississippi and two in Florida to Supervalu Holdings, Minneapolis, under a consent decree with the Federal Trade Commission. The retailer has also signed a supply agreement with Supervalu, effective in January, under which the distributor will become the primary supplier of frozen food to Jitney and a secondary supplier of selected grocery products to several stores in the merged company.

The chain will operate Delchamps as a wholly owned subsidiary and convert all Delchamps stores in Mississippi to the Jitney banner.

It will close Delchamps' corporate headquarters in Mobile and create new regional offices there and in New Orleans "because the needs of the market in Louisiana are different than those in Alabama and Mississippi, and also because we want to create as much of a regional presence as possible for buying, human resources, loss prevention and engineering and maintenance."

A regional office here will encompass Jitney's Northern division (Birmingham, Ala.; Memphis, Tenn.; Little Rock, Ark.; and here); the Mobile office will oversee stores in the Southeast division (units in Mobile and along the Mississippi and Florida Gulf coasts); and the Southwest office in New Orleans will oversee stores in Louisiana.

Jitney will move all distribution to its 900,000-square-foot facility here after closing Delchamps' 635,000-square-foot distribution center in Hammond, La., which Jitney hopes to sell.

It will reduce the merged entity's corporate staff by approximately 120 positions, although Julian said normal turnover and attrition should make it possible for people who want to stay to move to other positions, mostly at store level.

David W. Morrow, chairman and CEO of Delchamps, told SN he planned to retire last Friday, turning the CEO title over to Julian.

Morrow said Richard La Trace, Delchamps' president, will stay on for another four to six weeks before he leaves the company. It was not clear last week what Timothy E. Kullman, Delchamps' executive vice president and chief financial officer, plans to do.

Morrow, 66, became chairman and CEO of Delchamps in April 1995, five months after joining the chain's board. He had retired in September 1994 as chairman and CEO of Pueblo International, Carolina, Puerto Rico, after a career that included stints as president and chief operating officer of A&P, Montvale, N.J., from 1977 to 1982 and a year as president and chief operating officer of Albertson's, Boise, Idaho, in 1976-77 that capped a 28-year career there.

He told SN he had planned to retire when his contract with Delchamps expires at the end of the year, "but we sent up a trial balloon to find a suitable suitor and that's how the deal with Jitney came along." He said he has no desire to return to actively running a company, "but being on a company's board allows you to keep your finger in without the CEO's responsibilities, which is quite enjoyable."

Morrow said he will remain on the board of Furr's Supermarkets, Albuquerque, N.M.

He said he and his wife, Mary Helen, plan to divide their time between their ranch in Idaho during the summer and their home in Puerto Rico during the winter. However, he said he plans to remain in Mobile for a couple of months while his wife completes a master's degree in education.