Fleming Cos. announced yesterday that it has sold 26 of its Food4Less stores in California, plus two locations currently under construction, to Save Mart Supermarkets of Modesto, California.
Fleming will receive $130 million in cash for the stores, plus a “$35 million reduction of long-term liabilities in the form of capital leases,” according to the company. In addition, Fleming will get to supply the stores with groceries, a deal worth $385 million a year in volume.
As Fleming announced the sale, word came down that the US Securities and Exchange Commission (SEC) has begun an informal inquiry into the company, focusing on the its vendor trade practices and its public statements about the profitability of its retail operations.
"We will, of course, cooperate fully with the informal inquiry and will
provide the staff with all the information it needs in responding to its fact-
finding," said Mark Hansen, Fleming’s Chairman and CEO, said. "I hope, however, that this event does not detract from the very significant announcement we made earlier today regarding the first agreement to sell a number of our retail stores and the supply agreement we entered into with Save Mart Supermarkets."
Fleming will receive $130 million in cash for the stores, plus a “$35 million reduction of long-term liabilities in the form of capital leases,” according to the company. In addition, Fleming will get to supply the stores with groceries, a deal worth $385 million a year in volume.
As Fleming announced the sale, word came down that the US Securities and Exchange Commission (SEC) has begun an informal inquiry into the company, focusing on the its vendor trade practices and its public statements about the profitability of its retail operations.
"We will, of course, cooperate fully with the informal inquiry and will
provide the staff with all the information it needs in responding to its fact-
finding," said Mark Hansen, Fleming’s Chairman and CEO, said. "I hope, however, that this event does not detract from the very significant announcement we made earlier today regarding the first agreement to sell a number of our retail stores and the supply agreement we entered into with Save Mart Supermarkets."
- KC's View:
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Will the SEC probe overshadow the Save Mart sale? Probably.
All that Fleming has to do to correct the situation is have a bunch of positive quarters with no bad news.
How hard can that be?
