I would still foot the blame on Kmart for not paying their bills because they were out of money. So in effect Fleming cut them off because they had to, not because they intended to be malicious. And obviously they spun the yarn that they would have 1200+ Super K stores which would have misled Fleming to invest in the costly fixed infrastructure to service this large store base that never materialized, meaning that they were always going to be struggling with cash flow. Obviously Fleming wasn't very good either but it still sounds like the root cause was Kmart ineptitude.storewanderer wrote: ↑October 18th, 2023, 11:43 pmFleming was the source for all consumable goods for Kmart- this included all groceries, cleaning supplies, pet products. This excluded drug/HBA. Kmart was no longer self distributing any consumable items.ClownLoach wrote: ↑October 18th, 2023, 10:06 pmWas Kmart paying their bills? If not then Fleming should have stopped delivery. If they were then Fleming should have been sued out of business by Kmart.storewanderer wrote: ↑October 18th, 2023, 4:49 pm
What did Fleming do in Florida?
Fleming quit delivering to Kmart and that was one of the straws that drove Kmart to filing bankruptcy. It was going to happen anyway but when Fleming suspended deliveries that made it happen.
Kmart was to pay Fleming weekly. Kmart missed a scheduled payment, and Fleming stopped delivering. This was on January 21, 2002.
Kmart then filed bankruptcy on January 22, 2002. Kmart could not continue without consumable goods.
January 24, 2002, Fleming resumed shipping to Kmart once the bankruptcy court approved payments.
February 2003- Fleming and Kmart terminated their supply agreement, a contract rejection occurring as Kmart was still being bankrupt.
There is a lot more to the story there. Fleming involved itself with Kmart on the pie in the sky premise that Kmart would convert 1,200 or something of its stores to Super Kmarts. Instead when Kmart went bankrupt they closed half of the supercenters and many of the closures were those stores converted to Super Kmarts. This program wasn't going to work, the old dismal Kmarts were not going to make good conversions to include grocery, Fleming was a terrible wholesaler, and the entire idea and getting with Fleming was a very bad idea. In this regard Supervalu was very smart to let Fleming entertain Kmart; both were in the running to support Kmart in that supercenter conversion initiative.
April 2003- Flaming goes bankrupt
June-August 2003- Flaming essentially goes out of business as a grocery wholesaler, C&S wins the bid for most of the assets, but C&S quickly parceled many of the assets off to other wholesalers, and also did some asset trades with Supervalu in some regions (this is very important- who's to say C&S doesn't engage in similar sell off/trade transactions with divests from Kroger/Albertsons).
I do wonder about the concern of C&S actually holding onto these stores. It sounds like it would be far more beneficial to them to sell these to regional operators, like selling California divests to Raleys or Save Mart while maintaining supply contracts. Their track record over time seems to be that they are short term holders and long term sellers, no retail asset stays on their books that long. They are like hiring a service to take over operations needed to facilitate your merger deal. But if the net results pan out appropriately and more qualified competitors wind up acquiring the stores than it works out.
What I would really like to know is what other chains submitted bids. Were these locations really shopped around appropriately to the best run regional chains as well as regionals "a couple of states away" who could potentially buy as a new market entry? Or was Kroger demanding a single buyer that takes all of their problems off their back regardless of how poorly the potential result could be? It really sounds like we need transparency to the public in all of these dealings because I wouldn't be the least bit surprised if C&S was the best buyer for Kroger versus for the customer. How could they be trusted not to choose a unknown like Haggen was, even though they're promising to jettison warehouses and regional management? (Don't tell me the #1 or so ranked leaders are going, more likely the #157th ranked person moves to C&S instead of going on a performance action)