By Molly Matthews
  By the time Jitney Jungle Stores of America filed Chapter 11 bankruptcy protection last month, rumors about the grocery chain's status had been circulating for months.
  Less than a week before the announcement, Jitney's bond prices had collapsed, trading at 33 cents on every dollar of debt. Two weeks prior to the announcement, bonds had traded at 63 cents on every dollar of debt. To represent interest paid by the company, bonds ideally trade at slightly more than $1 for each dollar of debt.
  "Jitney Jungle has an 80-year history of successful operations in its core markets," said Ron Johnson, president and CEO. "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. With court protection under Chapter 11, Jitney Jungle will have the breathing room it needs to restructure its debt and complete its transition into a stronger company."
  Jitney's new strategy calls for a shift of competitive focus toward independents in small, rural towns in the store's markets, such as the company's Mississippi Delta locations in Yazoo City, Greenwood and Cleveland.
  "Our business is biscuits and gravy, not bagels," said Johnson.
  Jitney Jungle Stores of America, one of the largest supermarket operators in the southeast, currently operates more than 200 supermarkets, gas stations and liquor stores under the names Jitney Jungle, Sack and Save, MegaMarket, Premier, Pump and Save and Delchamps in Mississippi, Arkansas, Louisiana, Tennessee, Alabama, and Florida.
  Mark Manning, director of development for the Delta Council, said Jitney's filing of Chapter 11 would not have immediate effects in the Delta.
  "Long term, it could mean selling off assets, et cetera, but I imagine that most of the Delta properties would be pretty attractive if that occurs," Manning said.
  Potential purchasers include Food Lion, one of few grocery chains not in the middle of an acquisition, and Safeway, a West Coast based grocery chain. Supervalu, Inc. the nation's leading food distribution company, Albertsons and Kroger are in the middle of acquisitions.
  Second quarter sales for Jitney declined 4.9%, same store sales were down 5% and operating cash flow dropped 19%, following a similar first quarter slump, according to Powerize, a business information website.
  Jitney Jungle of America Inc. has been affected by operational problems, which includes a decrease in sales of about 6% per store as a result of competition and adversely affected operating margins caused by integration problems associated with the acquisition of Delchamps.
  In June, two of Jitney's top executives - Michael Julian, CEO, and Richard Coleman, CFO - resigned. Less a month before the announcement to reorganize, another top executive, Barry Cannada, resigned and W.H. Holman, Jr. retired from the company's board of directors. The moves signaled trouble for the grocery giant that originated in Mississippi.