Phil Talley, a pharmacist, works on prescription orders at Fred's in Chickamauga, Ga., on Wednesday, February 19, 2014. Talley recently sold Chickamauga Drug Store to Fred's and moved across town with several employees into the pharmacy in Fred's.Discount retail and pharmacy chain Fred's Inc. is filing for bankruptcy and closing its stores over the next two months.
The Memphis-based company said in a statement Monday that it has filed for chapter 11 bankruptcy and has begun liquidation sales at all of its retail locations. Fred's operated 568 stores in 15 states in the southeastern United States at the start of February, including 169 with full-service pharmacies, according to a court filing. But store closing this year have cut that number to only about 80 remaining stores.
Fred's has operated discount and pharmacy stores in Monteagle and Pikeville in Southeast Tennessee and in Chickamauga, Trenton and Lafayette in Northwest Georgia. A store in Jasper, Tennessee closed in June and was replaced with UniMachine.
"Despite our team's best efforts, we were not able to avoid this outcome," Fred's CEO Joe Anto said in a statement. "I want to thank all of our employees for their hard work and continued support of the company as we wind-down our operations."
The company said it expects to continue fulfilling prescriptions at most of its pharmacy locations, while pursuing the sale of its pharmacies.
Fred's has filed a motion with U.S. Bankruptcy Court seeking up to $35 million for a financing agreement with certain lenders. Chief Executive Officer Joe Anto said despite the company's best efforts, "we were not able to avoid this outcome."
Fred's started in 1947. Fred's said earlier this year it was closing more than 280 underperforming stores in 13 states.
More than 7,000 store closings are already in the works or completed so far in 2019 across the retail sector, according to Coresight Research.