Fleming Sheds 37% on News of Charge, SEC Probe

Fleming(FLM Quote) said Tuesday that it will record a pretax charge of $290 million related to cost reductions.

The food distributor also said it is cutting 1,800 jobs, and that the Securities and Exchange Commission has upgraded its inquiry into the company's accounting practices to a formal probe. Fleming said it hired PriceWaterhouseCoopers to assist in its own investigation, and added that it is cooperating fully with the SEC.

Fleming shares closed down 37.7% at $1.85.

Fleming said will close operations at two divisions currently managed by third-party operators -- in South Brunswick, N.J., and in Fort Wayne, Ind. The divisions had been dedicated to supplying Kmart and will close soon after deliveries to Kmart stores conclude in early March.

Fleming also said it will consolidate the business of two other divisions into other Fleming divisions.