MEMPHIS — Discount retailer Fred’s Inc. continues its retrenchment, announcing last month that it was closing another 129 stores, leaving it with 80 centered on its distribution center in Dublin, Ga.
The move is the latest in a series of store closings (including announcements in April and May) from Fred’s, which had 568 stores in 15 states as recently as February, according to a court filing.
Fred’s said all 166 of its pharmacies, including the 69 operating inside the stores recently marked for closure, will remain open as the company seeks a buyer for its pharmacy business.
“While it is never easy to make decisions that impact our valued employees and customers, this initiative represents another necessary step in our continued efforts to stabilize our business by simplifying our store portfolio and product assortment,” Joseph Anto, Fred’s chief executive officer, said in a statement in July.
Fred’s said that it was holding inventory clearance sales at the 129 stores in an effort to refocus its product mix, simplify its store portfolio and repay debt. Anto characterized the going-out-of-business sales as savings opportunities for Fred’s shoppers.
“We are pleased to present our loyal customers the unique and compelling opportunity to purchase heavily discounted items for a limited time,” Anto said. “We encourage shoppers to take advantage of these unmatched deals, and stock up on items that may be permanently removed from Fred’s shelves, come August.”
The company is working with liquidators Malfitano Advisors and SB360 Capital Partners in the store liquidation sales.
Fred’s said some of the stores slated to close could reopen “under a new operating model, with an updated assortment.”
The planned closings include 35 stores in Mississippi, 19 in Tennessee, 16 in Arkansas, 14 in Georgia and 12 in Alabama.
In 2018, Fred’s sold pharmacy patient prescription files and pharmacy inventory from 179 of its stores to Walgreens last year, as well as its EntrustRx specialty pharmacy business to a subsidiary of CVS Health.
In 2017, Fred’s submitted a bid to improve the likelihood of Walgreens Boots Alliance’s proposed buyout of Rite Aid Corp. by agreeing to buy 865 Rite Aid stores, a deal that would have made Fred’s the third-largest drug store chain. But that deal fell through after WBA retooled its Rite Aid bid to win regulatory approval.
Fred’s late last year told corporate employees that it would be moving its headquarters from Memphis to Dallas. The news followed the announcement that a hedge fund, Alden Global Capital, had upped its investment in Fred’s.