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DALLAS - In response to the recent announcement by Kmart that it is reviewing its current and prospective liquidity position, Fleming Companies Inc. today reported that its business relationship with Kmart remains strong. Because of the seven-day invoice and payment terms incorporated in the companies' supply agreement, receivables from Kmart currently vary between $0 and approximately $70 million. Average Kmart receivables represent less than 0.5% of Fleming's annualized sales. Kmart is current in its payments to Fleming, according to the company.
"The Fleming supply chain has proven to be the best and lowest cost solution for the supply of Kmart's food and consumables products," said Mark Hansen, chairman and CEO of Fleming. "Our experience to date indicates that food and consumables sales are robust in the Kmart stores and, fueled by our low-cost supply chain, a strength in this critical category of their current operations."
Fleming continues to aggressively grow its food and consumables distribution business due primarily to its low-cost supply chain, including highly productive distribution centers and centralized procurement. In addition to the Kmart alliance, non-Kmart business grew in excess of 10% in Fleming's third quarter.