• Fred’s Retains PJ Solomon to Evaluate Strategic Alternatives to Maximize Value

    Source: Nasdaq GlobeNewswire / 11 Apr 2019 08:34:34   America/New_York

    MEMPHIS, Tenn., April 11, 2019 (GLOBE NEWSWIRE) -- Fred’s, Inc. (NASDAQ: FRED) today announced the retention of PJ Solomon to evaluate strategic alternatives to maximize value for all shareholders.  The Company also announced that it will begin to close underperforming and unprofitable stores.

    Strategic Alternatives Review
    Fred’s has 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 to maximize value.

    There can be no assurance that the strategic review will result in any specific action, or any assurance as to its outcome or timing. The Company does not intend to discuss or disclose further developments related to its review unless and until the Board has approved a specific action or otherwise determined that further disclosure is appropriate, or if disclosure is required by applicable law.

    Store Closures
    Fred’s decision to close underperforming stores follows a comprehensive evaluation of the Company's 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 today while the Company’s 398 other stores will remain open. 

    Joseph Anto, Fred’s Chief Executive Officer, stated: “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.”

    Fred’s intends to close all 159 impacted stores by the end of May 2019.  Fred’s has partnered with Malfitano Advisors, LLC and SB360 Capital Partners to help manage the process and ensure a seamless experience for customers.  A list of impacted stores may be found at the end of this release.

    Pharmacy Sales
    Fred’s is also continuing to pursue the sale of its remaining pharmacy assets as part of its previously announced plan to unlock shareholder value by monetizing noncore assets.  In September 2018, Fred’s announced that it had 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.

    About Fred’s Inc.
    Since 1947, Fred’s, Inc. has been an integral part of the communities it serves throughout the southeastern United States. Today, Fred’s operates 557 discount value stores and its mission is to make it easy AND exciting to save money. Its unique format offers customers a full range of value-priced everyday items, along with terrific deals on closeout merchandise throughout the store. For more information about the Company, visit Fred’s website at www.fredsinc.com.

    Forward Looking Statement
    Comments in this news release that are not historical facts are forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. A reader can identify forward-looking statements because they are not limited to historical facts or they use such words as “outlook,” “guidance,” “may,” “should,” “could,” “believe,” “anticipate,” “project,” “plan,” “expect,” “estimate,” “objective,” “forecast,” “goal,” “intend,” “committed,” “continue,” or “will likely result” and similar expressions that concern the Company’s strategy, plans, intentions or beliefs about future occurrences or results. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Forward-looking statements include, but are not limited to, statements about future financial and operating results, the Company’s plans, objectives, business outlook, priorities, expectations and intentions, expectations for sales growth, comparable sales, earnings and performance, shareholder value, capital expenditures, cash flows, demand for products, share repurchases, strategic initiatives, including those relating to store closures and acquisitions and dispositions by the Company and the expected impact of such transactions on our strategic and operational plans and financial results, and any statement of an assumption underlying any of the foregoing and other statements that are not historical facts. Although we believe that the expectations, opinions, projections and comments reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and we can give no assurance that such statements will prove to be correct. A wide variety of potential risks, uncertainties and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to risks and uncertainties associated with: (i) the competitive nature of the industries in which we operate; (ii) our turnaround plan and the implementation of our strategic initiatives, and their impact on our sales, costs and operations; (iii) our store closures and the related sales of inventory and real estate issues; (iv) our divestitures; (v) utilizing our existing and new stores and the extent of our pharmacy department presence in new and existing stores; (vi) conditions affecting the retail sector as a whole; (vii) our reliance on a single supplier of pharmaceutical products; (viii) our pharmaceutical drug pricing; (ix) reimbursement rates and the terms of our agreements with pharmacy benefit management companies; (x) consolidation in the healthcare industry; (xi)  our private brands; (xii) the seasonality of our business and the impact of adverse weather conditions; (xiii) operational, supply chain and distribution difficulties; (xiv) merchandise supply and pricing; (xv) consumer demand and product mix; (xvi) delayed openings and operating new stores and distribution facilities; (xvii) our employees; (xviii) risks relating to payment processing; (xix) our computer systems, and the processes supported by our information technology infrastructure; (xx) our ability to protect the personal information of our customers and employees; (xxi) cyber-attacks; (xxii) changes in governmental regulations; (xxiii) the outcome of legal proceedings, including claims of product liability; (xxiv) insurance costs; (xxv) tax assessments and unclaimed property audits; (xxvi) current economic conditions;  (xxvii) our indebtedness and our ability to satisfy our debt obligations; (xxviii) the terms of our existing and future indebtedness, including the covenants set forth in the documents governing such indebtedness; (xxix) any acquisitions we may pursue and the ability to effectively integrate businesses that we acquire; (xxx) our ability to maintain effective internal controls over financial reporting; (xxxi) our largest stockholder holding a significant percentage of our outstanding equity; (xxxii) our ability to pay dividends and/or repurchase shares of our Class A voting common stock; (xxxiii) our ability to attract and retain talented executives; (xxxiv) any strategic alternatives that we decide to pursue, if any; and (xxxv) the factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent quarterly filings on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

    Contacts
    Fred’s Inc:
    Jen Ehlers
    817-369-5772
    jen.ehlers@fredsinc.com

    LIST OF STORE LOCATIONS TO BE CLOSED

    ADDRESSCITYSTATEZIP
    3056 ALLISON BONNETT MEMORIAL DRHUEYTOWNAL35023
    13254 HWY 411BRANCHVILLEAL35120
    212 W FORT WILLIAMS STSYLACAUGAAL35150
    65364 HWY 77TALLADEGAAL35160
    1683 CENTER POINT PKWYCENTER POINTAL35215
    3317 LORNA RDHOOVERAL35216
    321 N COURT STFLORENCEAL35630
    4150 FLORENCE BLVDFLORENCEAL35634
    13150 HIGHWAY 43RUSSELLVILLEAL35653
    1401 WOODMONT DRTUSCUMBIAAL35674
    710 CHEROKEE PLZCENTREAL35960
    1477 SUNSET DRGUNTERSVILLEAL35976
    1544 GREENBRIER LNANNISTONAL36207
    3077 HIGHWAY 431ROANOKEAL36274
    621 BOLL WEEVIL CIRENTERPRISEAL36330
    1318 S HIGHWAY 21 BYPMONROEVILLEAL36460
    1200 N MCKENZIE STREETFOLEYAL36535
    1549 HIGHWAY 5 SMARIONAL36756
    622 CHERRY DRLANETTAL36863
    430 S BRADLEY AVEEL DORADOAR71730
    535 N HERVEY STHOPEAR71801
    1426 W 1ST ST NPRESCOTTAR71857
    1110 E ANTIGO STSTAMPSAR71860
    1201 HIGHWAY 71 SMENAAR71953
    3395 HIGHWAY 5 NBRYANTAR72019
    207 S 2ND STCABOTAR72023
    245 OAK STCONWAYAR72032
    1125 MORNINGSIDE DRCONWAYAR72034
    1705 MALCOLM AVENEWPORTAR72112
    2706 E RACE AVESEARCYAR72143
    606 E BROADWAY STWEST MEMPHISAR72301
    2227 N WASHINGTON STFORREST CITYAR72335
    1324 W KEISER AVEOSCEOLAAR72370
    2308 S CARAWAY RDJONESBOROAR72401
    1723 W KINGSHIGHWAYPARAGOULDAR72450
    617 HIGHWAY 62 65 NHARRISONAR72601
    509 HWY 62 E.MOUNTAIN HOMEAR72653
    3303 W MAIN PLRUSSELLVILLEAR72801
    6179 HIGHWAY 278 NECOVINGTONGA30014
    550 N MAIN STCEDARTOWNGA30125
    970 E CHURCH STJASPERGA30143
    1916 REDMOND CIR NWROMEGA30165
    790 VETERANS PKWYBARNESVILLEGA30204
    1550 S. ZACH HINTON PKWYMCDONOUGHGA30253
    94 UPPER RIVERDALE RD SWRIVERDALEGA30274
    9215 HIGHWAY 19 NZEBULONGA30295
    501 S MAIN STSWAINSBOROGA30401
    156 WANDERWAY DRCLEVELANDGA30528
    7230 HIGHWAY 441 NDILLARDGA30537
    411 SMITH STROYSTONGA30662
    325 CURTIS PKWY SECALHOUNGA30701
    1426 WEST 1ST NORTHRINGGOLDGA30736
    3593 CHATTANOOGA RDTUNNEL HILLGA30755
    102 E 14TH AVECORDELEGA31015
    767 VETERANS PARKWAYHINESVILLEGA31313
    5485 NEW JESUP HWYBRUNSWICKGA31523
    925 E KING AVEKINGSLANDGA31548
    1014 S HUTCHINSON AVEADELGA31620
    1315 W SCREVEN STQUITMANGA31643
    500 US HIGHWAY 19 SCAMILLAGA31730
    2730 E PINETREE BLVDTHOMASVILLEGA31792
    1602 E SHOTWELL STBAINBRIDGEGA39819
    800 COLUMBIA RDBLAKELYGA39823
    215 BAILEY LNBENTONIL62812
    928 S 12TH STMURRAYKY42071
    3129 CANTON PIKEHOPKINSVILLEKY42240
    300 HWY 62 WPRINCETONKY42445
    2385 LAKEWAY DRRUSSELL SPRINGSKY42642
    125 HWY 51 NORTHHAMMONDLA70401
    2490 W CONGRESS STLAFAYETTELA70506
    806 VETERANS DRCARENCROLA70520
    1801 WEST MAIN STREETFRANKLINLA70538
    1114 SOUTH MAIN STREETST. MARTINVILLELA70582
    1514 SAMPSON STREETWESTLAKELA70669
    228 W HIGHWAY 30GONZALESLA70737
    10710 GREENWELL SPRINGS ROADBATON ROUGELA70814
    5907 OLD MOORINGSPORT ROADSHREVEPORTLA71107
    5751 SHED RDBOSSIER CITYLA71111
    2350 STERLINGTON RDMONROELA71203
    310 E MAIN STJONESBOROLA71251
    4628 HIGHWAY 28 EPINEVILLELA71360
    400 DIXIE PLZNATCHITOCHESLA71457
    121A SOUTH SPRIGG STREETCAPE GIRARDEAUMO63701
    441 HIGHWAY 53POPLAR BLUFFMO63901
    626 22ND AVE SMERIDIANMS0
    520 CENTRAL AVECOLDWATERMS38618
    148 W VAN DORN AVEHOLLY SPRINGSMS38635
    3031 GOODMAN RD WHORN LAKEMS38637
    1600 S COLORADO STGREENVILLEMS38703
    7616 HIGHWAY 80GREENVILLEMS38703
    306 E SUNFLOWER RDCLEVELANDMS38732
    302 NORTH MAIN ST.LELANDMS38756
    809 VARSITY DRTUPELOMS38801
    1776 MCCULLOUGH BLVDTUPELOMS38801
    813 W PARK AVEGREENWOODMS38930
    2932 HIGHWAY 49 SFLORENCEMS39073
    237 WOODLAND DRFORESTMS39074
    1700 SIMPSON HWYMAGEEMS39111
    422 W CUNNINGHAM AVETERRYMS39170
    1200 JERRY CLOWER BLVDYAZOO CITYMS39194
    540 RAYMOND RDJACKSONMS39204
    225 MEADOWBROOK RDJACKSONMS39206
    235 GEORGE WALLACE DRPEARLMS39208
    7261 S SIWELL RDBYRAMMS39272
    714 PECAN AVEPHILADELPHIAMS39350
    1000 BROADWAY DRHATTIESBURGMS39401
    HWY 13 NORTHGATE S/CCOLUMBIAMS39429
    1693 HIGHWAY 90GAUTIERMS39553
    3176 BIENVILLE BLVDOCEAN SPRINGSMS39564
    2511 INGALLS AVEPASCAGOULAMS39567
    218 S WHITWORTH AVEBROOKHAVENMS39601
    304 5TH ST SCOLUMBUSMS39701
    201 G ALABAMA STCOLUMBUSMS39702
    107 N MERIDIAN STABERDEENMS39730
    26591 E MAIN STWEST POINTMS39773
    988 ERWIN RD.DUNNNC28334
    1155 N MAIN STMARIONNC28752
    11931 S 226 HWYSPRUCE PINENC28777
    700 E CHEROKEE STWAGONEROK74467
    1180 FIVE CHOP RDORANGEBURGSC29115
    105 B JACOBS HWYCLINTONSC29325
    213 W RUTHERFORD STLANDRUMSC29356
    119 COLLEGE PARK RDLADSONSC29456
    122 E SHOCKY FERRY RDANDERSONSC29624
    4905 EMERSON STHODGESSC29653
    9710 HIGHWAY 81 SIVASC29655
    315 W FRONT STLIBERTYSC29657
    310 HAMPTON AVEPICKENSSC29671
    109 CESTRAIN SQCHESTERSC29706
    401 W MARTINTOWN RDNORTH AUGUSTASC29841
    390 HIGHWAY 149CLARKSVILLETN37040
    420 W MAIN STGALLATINTN37066
    230 BROADWAYHARTSVILLETN37074
    230 E GAY STLEBANONTN37087
    912 N CHANCERY STMCMINNVILLETN37110
    1664 MIDDLE TENNESSEE BLVDMURFREESBOROTN37130
    114 W KNIGHT STPORTLANDTN37148
    1130 S MCCRARY STWOODBURYTN37190
    260 16TH AVEDAYTONTN37321
    1755 DECHERD BLVDDECHERDTN37324
    3600 MAIN STJASPERTN37347
    122 FIVE RIVERS PLAZA WAYNEWPORTTN37821
    337 E MAIN STBROWNSVILLETN38012
    450 HWY 72 WESTCOLLIERVILLETN38017
    805 PENNELL LNDYERSBURGTN38024
    4280 GETWELL RDMEMPHISTN38118
    5016 OLD SUMMER RDMEMPHISTN38122
    850 VOLUNTEER DRPARISTN38242
    1688 S HIGHLAND AVEJACKSONTN38301
    211 THREE OAKS DRIVEMEDINATN38355
    399 MULBERRY AVESELMERTN38375
    700 NORTH MAIN STREETMT. PLEASANTTN38474
    1670 W COLLEGE STPULASKITN38478
    601 BROADWAY AVEGLADEWATERTX75647
    605 N HENDERSON BLVDKILGORETX75662
    1803 E GENTRY PKWYTYLERTX75702
    1601 S MAIN STLINDALETX75771
    1123 STATE HIGHWAY 110 NWHITEHOUSETX75791
    1000 S MAIN STMC GREGORTX76657

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