Updated at 5:23 p.m. on Thursday, April 11, 2019, with more information.
Fred's Inc. says it will close 159 underperforming and unprofitable stores next month, including its stores in Ringgold, Tunnel Hill and Calhoun in Northwest Georgia and in Dayton, Jasper and McMinnville in Southeast Tennessee.
The Memphis-based retailer will maintain 398 discount stores, although company CEO Joseph Anto said Thursday it is also continuing to pursue the sale of its pharmacy assets. Liquidation sales at the stores to be closed started Thursday and the affected stores are all expected to be shut down by the end of May.
Anto said Fred's will work to move displaced workers to other stores, where possible.
"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," he said. "Decisions that impact our associates in this way are difficult, but the steps we are announcing are necessary."
The list of stores being closed includes 31 in Mississippi, 25 in Georgia, 23 in Tennessee, 19 each in Alabama and Arkansas, 14 in Louisiana, 11 in South Carolina, six in Texas, four in Kentucky, three in North Carolina, two in Missouri and one each in Illinois and Oklahoma.
Fred's, a discount retailer that competes with chains such as Dollar General, Family Dollar and Dollar Tree, lost a record $150.2 million last year on more than $1.8 billion in sales. The company has reported losses in each of the past four years and the closings announced Thursday reflect the ongoing shakeout in the retail industry, which has already hit such retail giants as Toys R Us, Sears and Kohl's and forced store closings at each over the past couple of years.
In 2017, a deal for Fred's to acquire hundreds of Rite Aid or Walgreens stores collapsed. Last September, Fred's agreed to sell its pharmacy patient prescription files and related pharmacy inventory of 179 Fred's stores in 10 states to Walgreens for $165 million.
Fred's said Thursday that it has retained PJ Solomon "to evaluate strategic alternatives" for the company. In response to the announcement, shares of Fred's fell Thursday by nearly 4.8 % to $1.99 per share — its lowest price so far in 2019.
The company was founded in Coldwater, Mississippi in 1947 and moved its headquarters to Memphis in 1953.
The Fred's stores being closed in the Chattanooga region include:
» 325 Curtis Pkwy SE, Calhoun, Georgia.
» 1426 W. 1st North, Ringgold, Georgia.
» 3593 Chattanooga Road, Tunnel Hill, Georgia.
» 260 16th Ave., Dayton, Tennessee.
» 3600 Main St., Jasper, Tennessee.
» 912 N. Chancery St., McMinnville, Tennessee.