Fleming Cos. announced that it will shut down operations at five of its divisions, resulting in the elimination of some 800 positions, or seven percent of the company's workforce.
While there are no estimates yet available about how much the job cuts and closures will save the company, Fleming did say that the divisions are not profitable and show no signs that they will become so. The closures include a general merchandise distribution center in King of Prussia, Pa. and grocery wholesale divisions in Phoenix; Salt Lake City; Warsaw, N.C.; and Northeast, Md.
The divisions are scheduled to be shuttered by mid-June. All told, they combine for roughly $1 billion in sales. Fleming has been in bankruptcy protection since April 1.
Bill May, President and CEO of Wholesale Distribution, said, "While the decision to exit any market is difficult, it makes excellent sense for us to scrutinize our operations and concentrate our human and financial resources on those business units and markets in which performance is highest and opportunities are greatest. The previously announced loss of business at these divisions and their limited growth opportunities has made it impossible for us to continue in these markets as a core part of Fleming operations.
"After careful study and consideration, it was decided to take this necessary action to advance our restructuring, which is important to our company and our aggregate customer base."
"To minimize disruption to our customers supplied by the closing divisions, we are committed to assisting the affected retail customers in their successful transfer to a new supplier, as practicable," said May.
Fleming also announced that it will open a new convenience division in Denver, Colorado, replacing one that was destroyed by a fire lat last year.
While there are no estimates yet available about how much the job cuts and closures will save the company, Fleming did say that the divisions are not profitable and show no signs that they will become so. The closures include a general merchandise distribution center in King of Prussia, Pa. and grocery wholesale divisions in Phoenix; Salt Lake City; Warsaw, N.C.; and Northeast, Md.
The divisions are scheduled to be shuttered by mid-June. All told, they combine for roughly $1 billion in sales. Fleming has been in bankruptcy protection since April 1.
Bill May, President and CEO of Wholesale Distribution, said, "While the decision to exit any market is difficult, it makes excellent sense for us to scrutinize our operations and concentrate our human and financial resources on those business units and markets in which performance is highest and opportunities are greatest. The previously announced loss of business at these divisions and their limited growth opportunities has made it impossible for us to continue in these markets as a core part of Fleming operations.
"After careful study and consideration, it was decided to take this necessary action to advance our restructuring, which is important to our company and our aggregate customer base."
"To minimize disruption to our customers supplied by the closing divisions, we are committed to assisting the affected retail customers in their successful transfer to a new supplier, as practicable," said May.
Fleming also announced that it will open a new convenience division in Denver, Colorado, replacing one that was destroyed by a fire lat last year.
- KC's View:
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It's a start, at least from the financial perspective. We're not sure what it does for the company's long-term operational issues.
But here's the question that needs to be considered.
If you were a retailer looking for a wholesaler, is there any reason -- any at all -- that you would consider Fleming?
The only one we can come up with at the moment would be if Fleming were the only wholesaler serving a market.
