News Column

Fred's to close 60 stores by year's end

August 29, 2014

By Wayne Risher, The Commercial Appeal, Memphis, Tenn.



Aug. 29--Memphis-based Fred's Inc. has announced plans to close 60 low-performing stores that don't have pharmacies.

The company didn't publicly identify the stores that would close by the end of 2014.

Fred's operates more than 700 stores in the Southeast and employs about 950 people in Greater Memphis, including 450 in the head office.

The closings are part of the discount chain's strategy of ramping up a new store model that focuses on pharmacy and convenience items.

They were announced Thursday as Fred's reported a net loss of $16.4 million or 45 cents a share, a steep reversal of year-earlier results for the second quarter ended Aug. 3.

Company officials also announced other key operational changes designed to improve returns, including inventory changes, expanded product sourcing capabilities for general merchandise and a transition to a new pharmacy prime vendor agreement with Cardinal Health.

Chief executive officer Bruce A. Efird said the company in the second quarter accelerated pharmacy acquisitions with an eye toward a target of having pharmacies in 65 to 70 percent of stores.

"Although we were disappointed in second quarter financial results, there were several key wins in the quarter," Efird said. "We saw improvement in general merchandise sales and customer from our new marketing program, which indicates positive traction for the future."

The company posted net sales of $491 million in the quarter, up about 2 percent from a year earlier.

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(c)2014 The Commercial Appeal (Memphis, Tenn.)

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Source: Commercial Appeal (Memphis, TN)


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