Fleming Cos. announced that it has laid off some 350 executives in the last few months, cuts that should save the company some $40 million.
The announcement came just a day after Fleming management said it will sell its 110 price impact stores that operate under the Food 4 Less and Rainbow Foods banners.
The company expects that proceeds from the sale will generate in excess of $450 million net of taxes, which will allow Fleming to continue to reduce its debt.
Investors, at least, seemed pleased with the Fleming moves, as the company’s shares rose 16 percent on Wednesday. Of course, the shares had been trading at 30-year lows in recent days, so the increase still didn’t make up the long-term difference.
In addition, Fleming is facing yet another investor lawsuit charging it with making misleading statements about its performance. This is the fourth such suit filed against the company in recent months.
The announcement came just a day after Fleming management said it will sell its 110 price impact stores that operate under the Food 4 Less and Rainbow Foods banners.
The company expects that proceeds from the sale will generate in excess of $450 million net of taxes, which will allow Fleming to continue to reduce its debt.
Investors, at least, seemed pleased with the Fleming moves, as the company’s shares rose 16 percent on Wednesday. Of course, the shares had been trading at 30-year lows in recent days, so the increase still didn’t make up the long-term difference.
In addition, Fleming is facing yet another investor lawsuit charging it with making misleading statements about its performance. This is the fourth such suit filed against the company in recent months.
- KC's View:
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No huge surprise about the layoffs, except for the fact that Fleming has been denying it for weeks.
Here’s the question that must be addressed. Fleming is making these changes to address investor issues, but how will they affect the retailers that are its customers? If they in any way hurt the kinds of products and services that these retailers offer their customers, then once again the investor community will have been placed on a higher pedestal than the shopper…, which in our view is always a mistake.
We’re sure Fleming believes it is doing the right thing. But we’re also sure that in many cases, the ultimate customer is not at the top of everybody’s list in terms of concerns.
