Fleming Says Relationship With Kmart Still 'Strong'

Fleming Cos.(FLM Quote) said its relationship with Kmart(KM Quote) remains "strong" and that average receivables owed to it by the troubled discounter represent less than 0.5% of its annual sales.

The food wholesaler's comments came after Kmart said late last week it is reviewing its liquidity situation and seeking supplemental financing from its lenders.

Kmart's senior unsecured debt rating was lowered three notches by Moody's on Friday to B2, its fifth-highest junk rating. The rating agency said it has "uncertainty about the prospects of Kmart's franchise longer term and the traction of its turnaround strategy."

Kmart's common shares are trading at a 30-year low and were recently down 49 cents, or 15%, to $2.80. The stock, which was the most heavily traded on the New York Stock Exchange Monday, began swooning after an analyst commenting on weak Christmas sales raised the possibility the company might face a bankruptcy filing.