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Ripples From Kmart Bankruptcy Hit Publishers

The bankruptcy of retail giant Kmart -- the largest U.S. retailer to go bankrupt -- has already claimed one victim: Nintendo.
According to bankruptcy papers filed by Kmart, Nintendo of America is owed $44.91 million by the retailer, making NoA the firm's 14th largest creditor. A Nintendo spokesman told CBS Marketwatch that the company was due fees for game deliveries and sales, but did not cite a specific amount. The spokeman said, however, that even if Nintendo cannot recover the credit it extended to Kmart, it will be "only a minor impact." Activision also addressed the Kmart filing, but said that it does not expect the bankruptcy protection to "have any material impact on [Activision's] earnings results". The publisher said it stopped shipping products to Kmart late last month, and that Kmart represented less than 2.5 percent of Activision's consolidated revenues for the last three quarters of 2001. "We have been monitoring Kmart's financial situation for several months now," said Ron Doornink, president and COO of Activision. "As part of our prudent planning, we maintain credit insurance and conservative reserve and credit policies specifically for these types of situations."

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