Boston, MA 09/02/2014 (wallstreetpr) – According to reports, Fred’s, Inc. (NASDAQ:FRED) has decided to close around 60 such stores by the end of the year which do not have any pharmacies. Although it didn’t name any particular store that would be closed. FRED has a wide presence in the South-East part of the country as it has around 700 stores in the Greater Memphis area. Total numbers of people who work for FRED in this area are around 950. Out of these 950 people, 450 work in head-office while others work in regional locations.
Logic Behind Closing Stores:
The senior management of the company seeks to remodel the entire organization. It is a part of Fred’s, Inc. (NASDAQ:FRED)’s strategy to acquire a new store model that focuses more on convenience and pharmacy items. The company recently announced its financial results for the second quarter that ended on August 3, 2014. These results couldn’t attract the shareholders as FRED reported a loss figure of $16.4 million or 45 cents per share.
Closing of stores is not the only step that the management of FRED has taken to remodel the entire company. Important changes to increase returns are certainly on the cards. Some of these steps include change in inventory, initiation of a new pharmacy prime vendor agreement with Cardinal Health and expanding product sourcing capabilities for general merchandise. According to Bruce A. Efird, Chief Executive Officer of Fred’s, Inc. (NASDAQ:FRED), “We tried hard to increase pharmacy acquisitions during the 2Q 2014 with the objective of having pharmacies in 65% to 70% stores. He further said that although the financial results of the company during the 2Q 2014 were not up to the mark, but still FRED did well in many other areas.
The general merchandise sales of Fred’s, Inc. (NASDAQ:FRED) increased significantly during the quarter along with customers from new marketing program which indicate positive traction for the future.
