Whether leased or owned, the fate of the estimated 3.2 million sf of properties rests with the US Bankruptcy Court in Wilmington, DE. Yesterday's decision in the rapidly changing operations for the Dallas-area food giant is to "end operations in these distribution centers. Fleming's not made a determination as to the disposition of the facilities or the equipment in connection with the bankruptcy," a Fleming contact tells GlobeSt.com. As yet, petitions have not been entered to vacate leases or sell any of the properties.

The wholesale distribution centers will close by mid-June. Fleming said the centers collectively represent $1 billion in annualized revenue.

The shutdown list consists of a 672,000-sf center at 1018 US 117 S in Warsaw, NC; a 555,000-sf facility at 2455 W. 1500 S in Salt Lake City; a 377,000-sf building at 201 W. Church Rd. in King of Prussia, PA; a 591,000-sf structure in Northeast, MD; and a one-million-sf warehouse at 624 S. 25th Ave. in Phoenix. King of Prussia is a general merchandise center while the others are dedicated grocery store suppliers.

In making the decision, Fleming is completely exiting Arizona, Maryland and North Carolina. Fleming says the shutdowns will not affect its convenience distribution centers, which keeps a footprint, albeit smaller, in Utah and Pennsylvania.

The bottom line is to slash costs as Fleming repositions and restructures to survive stock exchange de-listings and devalued shares triggered by last year's Kmart bankruptcy. Bill May, Fleming's president and CEO of wholesale distribution, acknowledges that the decision wasn't easy to make, but "it makes excellent sense" in that "human and financial resources" can be deployed to more profitable centers, such as Denver where the team's ramping up for a May 16 opening of a new convenience distribution center that replaces one gutted by fire last year.

"The previously announced loss of business at these divisions and their limited growth opportunities have made it impossible for us to continue in these markets as a core part of Fleming operations," May said in a press release. He added Fleming intends to help retailers identify and transfer to a new supplier.

Fleming immediately will begin moving inventory to its other facilities while weighing options for the Minneapolis division, which supplies the 31 Rainbow Foods stores slated to be bought by Roundy's Inc., owned by investment funds controlled by Willis Stein & Partners in Chicago. For previous story, click here.

Bankruptcy court's first action on the proposed multi-million-dollar buyout is set for May 19, with sale possible June 4, according to Fleming's latest SEC filing. Before Fleming started weeding its assets, it reported that the warehouse real estate portfolio exceeded 22 million sf coast to coast.