MEMPHIS, Tenn. (AP) — Discount retail and pharmacy chain Fred’s Inc. is filing for bankruptcy and closing its stores over the next two months.
The Memphis, Tenn.-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.
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.”
The company has closed stores in waves since the beginning of this year, going from almost 600 stores in January to fewer than 100 now.
Stores in Brookhaven were targeted for closure in February and April. In June, stores in Tylertown, Woodville and Kentwood, La., were part of another wave of closures.
Mid-July brought more closures, including stores in McComb, Centreville and Monticello, leaving the closest stores in the longtime chain to Southwest Mississippi in Morton and Franklinton, La. Now those stores, too, are going away as the chain liquidates and fades away.
While many, including Pike County Chamber of Commerce Executive Director Catherine Sanders, see the company as a victim of the trend toward online shopping, a postmortem in Forbes magazine this week attributes Fred’s demise to too much competition in its market sectors.
Fred’s long survived and thrived as a discount retailer that called itself “the low-price leader.” The Forbes article cited larger conglomerate stores such as T.J.Maxx, Marshalls, Ross and Burlington as competition that hurt Fred’s and led to its bankruptcy filing this week, and that doesn’t take into account the stores such as Walmart and Dollar General that also splay across the retail landscape.
Forbes said the pharmacy business, too, was fraught for Fred’s, with Walgreens and CVS as the heavyweights in the market. There, too, Walmart is also a major player.
Fred’s started in 1947. Fred’s said earlier this year it was closing more than 280 underperforming stores in 13 states.
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News editor Mack Spencer contributed to this report.