DALLAS - Fleming today announced that Kmart did not make its regular weekly payment for delivery of food and other consumable products. <br>
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As a result, Fleming has stopped shipments to all Kmart stores, except for certain perishable food products that were in-transit. Fleming has also submitted a notice of reclamation to Kmart along with a notice of failure to pay.<br>
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"Fleming is working with Kmart as they navigate through their current financial problems and we intend to resume delivery of food and other consumable products to Kmart upon receiving satisfactory assurance of Kmart's performance," said Neal Rider, Executive Vice President and Chief Financial Officer.<br>
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"We are also taking the appropriate steps to protect Fleming's interest. Filing the reclamation claim now significantly improves our ability to recover the unpaid inventory, if necessary, or the related receivables." As previously stated, Fleming's business arrangement with Kmart includes a seven-day invoice and payment cycle. The company believes the short payment terms for product shipments to Kmart, plus the reclamation claim, put Fleming in a strong position to recover most of its approximately $78 million in merchandise receivables.<br>
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Kmart's Chief Executive Officer Charles C. Conaway said, "Our alliance with Fleming has created a more efficient supply chain that has made consumables a strength of our operation. We look forward to resuming our critical business relationship with Fleming once we work through these financial issues and are able to provide Fleming with adequate assurance of payment."<br>
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