Whodunnit – Sorting Through the Fleming Rubble
By George Anderson
The Topeka Capital-Journal provides a post mortem report on Fleming that says
the wholesaler died because of its reliance on Kmart and suppliers’ demand for
upfront payment before goods were shipped.
The combination of these factors resulted in a cash flow crunch that left Fleming
with too much debt, too little product and too few customers, according to sources
cited by the paper.
“It was a tremendous cash-flow crunch,” said Bryan Smith, controller and human
resources director for Fleming’s general merchandise division. “It really boils
down to that. We were in good shape until everybody wanted their money up front.”
Moderator’s Comment: Why did Fleming fail? What can
others learn from the Fleming experience?
Many will put the blame on Fleming’s Kmart deal. We’re
of the mind, however, that the Kmart deal was made, at least in part, to try
and hide/fix the problems that were inherent at the wholesaler long before the
deal was announced. [George
Anderson – Moderator]