Fred’s, Inc. will begin to close 159 underperforming and unprofitable stores, and has retained PJ Solomon to evaluate strategic alternatives.
The company’s decision to close underperforming stores follows a comprehensive evaluation of its store portfolio, including historical and recent store performance and the timing of lease expirations, among other factors. Liquidation sales at the 159 stores currently designated for closure will begin while the company’s 398 other stores will remain open. Fred’s intends to close all 159 impacted stores by the end of May 2019.
Joseph Anto, Fred’s CEO, said, “After a careful review, we have made the decision to rationalize our footprint by closing underperforming stores, with a particular focus on locations with shorter duration leases. Most of these stores have near‐term lease expirations and limited remaining lease obligations. Decisions that impact our associates in this way are difficult, but the steps we are announcing are necessary. We will make every effort to transition impacted associates to other stores where possible.”
In addition, Fred’s retained PJ Solomon to advise it in connection with a review of strategic alternatives to maximize value for all shareholders. The review will include a thorough evaluation of the company’s current operating plan, as well as all other potential alternatives.
Fred’s also noted that it is continuing to pursue the sale of its remaining pharmacy assets. In September 2018, Fred’s reached an agreement with Walgreens to sell the pharmacy patient prescription files and related pharmacy inventory of 179 Fred’s stores located across 10 Southeastern states; the transaction closed in the company’s fourth fiscal quarter.